FRANKFURT (MNI) – The Euro is irreversible, and any doubts in the
markets about whether countries will remain in the currency bloc must be
fundamentally dealt with, European Central Bank Executive Board member
Peter Praet said in an interview with Belgian newspaper De Standaard
published Saturday.
Praet said European policy-makers were headed in the right
direction but may be moving too slowly for markets. The situation
remains “very serious” and it is up to governments rather than the ECB
to act: “Our monetary support gives the politicians time. That time must
now urgently be put to good use.”
Praet told the paper that the Eurozone had entered a critical
phase: “Everything is starting to play a part: emotions, politics,
cultural differences and even irrational reflexes.”
“There is a sort of fear that has seeped into the financial markets
that some countries in the euro will leave and return to their own
currency. This is unacceptable and must be dealt with in a fundamental
way,” he added.
Praet said both institutional weaknesses in the Eurozone as a whole
and problems in individual countries were still playing a role in the
crisis. While the institutional path laid out by EU Council President
Herman Van Rompuy sent a “strong signal” and goes in the right
direction, “the problem is that for the markets it is moving much too
slowly. There is no clear timeline.”
Praet said the crisis had laid bare fiscal problems in many
individual Eurozone countries that must be tackled simultaneously with
institutional issues.
“Because of the crisis, countries like Italy, France and Belgium
have lost 10 years time to bring their finances in order. All problems
must now be tackled at the same time. There is no margin for error
anymore.”
Praet said Belgium had done “relatively well” in the crisis and
succeeded in winning back the trust of markets but remained “vulnerable”
as market sentiment can change quickly.
Praet would not discuss ECB President Mario Draghi’s remarks
recently in London or the decisions taken Thursday with the paper,
calling them “too sensitive.”
— Frankfurt bureau: +49 69 720 142; email: ccermak@marketnews.com —
[TOPICS: M$$EC$,M$X$$$,MGX$$$,MT$$$$]
