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Changes need to be made to the euro area if it is to become sustainable, European Central Bank council member Jens Weidmann was quoted by Germany’s Welt am Sonntag as saying.
“The currency union can’t function sustainably the way it is at the moment,” Weidmann, who’s also Bundesbank president, was cited by the Berlin-based paper as saying. “We need more clarity if we want to go down the route to a fiscal union, or if we want to keep relying on self-responsible national budget policies. In the latter case, the common liabilities need to be narrowly limited.”
Germany should stay in the single-currency zone because of the high costs and risks linked to leaving, Weidmann was quoted as saying.
“A disintegration of the currency union would be linked to extremely high costs and risks,” he said. “That’s why such a scenario can’t be the goal of politicians.”
This “should not mean that Germany becomes open to blackmail and promises guarantees without control,” Weidmann was quoted as saying. “That would erode the stability basis of the currency union.”
To contact the editor responsible for this story: Reed Landberg at firstname.lastname@example.org