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Euro zone is “unsustainable” without further integration, said today the president of the European Central Bank (ECB) Mario Draghi to the European Parliament said on Monday.
Now markets question the fundamental structure of the euro Dear acknowledged that speaks to the European Parliament as head of the newly created super-controlling body for European systemic risk council (European Systemic Risk Board – ESRB).
“The structure we have for 10 years, which was generally judged as sustainable (must add, perhaps myopically) now appears unsustainable unless further measures are taken (for integration – Ed.),” He said. European leaders must clarify their views on the euro as the ECB cannot fill the political vacuum, said the financier, said.
Dear joined calls for “Union Bank”, including a joint scheme to guarantee deposits, mutual fund and the banks’ stronger centralization of banking supervision. ” Spain and its financially troubled banks Bankia showed the need for such measures, said the head of the ECB before the Committee on Economic Affairs of the EP.
Confidence in the markets and not supported by the ECB is the key to persuade banks to increase lending, he added, quoted by Reuters. When problems occur with the recapitalization of banks, better governments make mistakes, doing too much rather than too little, the banker said in Parliament.
Cases to the rescue of Bankia in Spain, and before that – of Dexia in Belgium showed that national regulatory authorities are reluctant to recognize the extent of problems in their national institutions. Ultimately, this increases the cost of rescue operations and undermines the credibility and transparency. EU should be more pressure on banks to “clean up” their finances, he added. Draghi did not mention the joint issuance of bonds, so called Eurobonds.