FRANKFURT (MNI) – Continuing financial transfers within the
Eurozone risk inflaming both political and economic tensions and could
ultimately endanger the future of the single currency, former European
Central Bank Executive Board member Otmar Issing argues in an article to
be released next week.
“The present seemingly unstoppable process toward further financial
transfers will generate tensions of an economic and especially political
kind,” Issing, a German, who served as ECB chief economist from the
bank’s founding in 1998 until 2006, wrote in an article for the January
Bulletin of the Official Monetary and Financial Institutions Forum.
“The longer this process is characterized by unsound conduct of
individual member countries, the more these tensions will endanger the
existence of EMU,” Issing added.
Journalist and monetary policy guru David Marsh cited Issing’s
piece in a column published Monday on the MarketWatch website. Marsh
serves as co-chairman of the Forum.
Marsh notes that prior to his appointment to the ECB’s board,
Issing had been a skeptic of the common currency, but had as recently as
2008 written optimistically about the future of the EMU.
Issing’s revived doubts come amidst renewed concern about sovereign
finances within the Eurozone, especially along its periphery. German
media reported over the weekend that Germany and France are pushing
Portugal to accept an EU/IMF rescue package soon.
Earlier Monday, however, German Finance Minister Wolfgang Schaeuble
insisted that his country was not pushing anyone toward an EU rescue
fund.
–Frankfurt bureau, +49-69-720142, tbuell@marketnews.com
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