FRANKFURT (MNI) – Each Eurozone government is responsible for its
own debts and EMU’s no-bailout clause is not up for debate, according to
European Central Bank Executive Board member Juergen Stark.
The European Monetary Union “is not on the road to a transfer
union,” Stark said in an interview with the Germany business daily
Boersen-Zeitung published Tuesday.
“Demands that high-performing economies help the weaker ones
contradict the founding principles of monetary union,” he said,
reminding that loans for countries with financial woes carry strict
conditions.
The weaker economies must bolster potential growth through
structural reforms, the ECB’s chief economist argued, adding that this
is already happening.
Conversely, overheating economies, as was the case with the real
estate booms in Spain and Ireland, must counter such excesses in the
future via national policies, he said. “This did not happen in the past;
governments must learn this lesson from the crisis.”
While the ECB takes the growing scepticism of many Germans toward
the euro seriously, the central bank for its part has fulfilled its
mandate, Stark said: “We have delivered price stability, and that is
exactly what the Germans expected and should expect.”
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