Wall Street Journal
February 21, 2011
The financial rescues of Greece and Ireland have damaged the foundations of Europe’s currency union, Deutsche Bundesbank President Axel Weber said Monday.
In a speech to an audience of academics and business representatives in Duesseldorf, Weber said it was essential not to let the deals that have been made to keep financial stability in the euro zone become the norm.
“We have to strengthen the foundations again,” he said.
Returning to a theme already made earlier Monday in the Bundesbank’s monthly report for February, Weber warned against measures that buy time in the short term but which encourage moral hazard in the longer term by creating false incentives for states.
“All too often, short-term, ad hoc decisions are taken that are counter-productive in the medium term,” Weber said.
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