FRANKFURT (MNI) – The Eurozone crisis cannot be solved by providing
increasing volumes of financial assistance, Bundesbank board member
Andreas Dombret said Tuesday.
“You cannot restore trust permanently by putting ever more money on
the table, for example by enlarging the rescue fund time and again. This
strategy will eventually face political or financial limits,” Dombret
said.
Any suggestion that additional cash should be provided via the
central bank’s printing press are “dangerous,” Dombret warned. This
would only undermine “the most important basis of a currency: the
independence of a price stability oriented central bank.”
In a speech text provided by the Bundesbank, Dombret also warned
that in the current Eurozone framework, Eurobonds would not offer a
solution. Their introduction would lead to imbalances between liability
and control and would remove key incentives for sound fiscal policies.
Dombret welcomed decisions taken by EU leaders at the December 9
summit in Brussels and stressed that they “must not be watered down
either when finalizing details or in their implementation.” He said:
“The Bundesbank will not cease to push for this implementation.”
Dombret also said that he opposes the idea of introducing special
regulatory rules for sovereign debt ratings. “Instead, the regulatory
reliance on ratings should be reduced wherever possible,” he said.
–Frankfurt newsroom +49 69 72 01 42; Email: jtreeck@marketnews.com
[TOPICS: M$$EC$,MT$$$$,M$X$$$,MGX$$$,M$$CR$]
