FRANKFURT: The euro zone needs to pull closer together, starting with a common backstop for its banks, if it is to win over its doubters, the European Central Bank's chief economist Peter Praet said on Friday.
With eurosceptic parties poised to gain seats at upcoming European Union elections, Praet acknowledged that the single currency's reputation had been tarnished by years of crisis.
"The notion that the euro provides stability and security has been weakened by the gaps in our governance framework," he was due to tell an audience in Frankfurt, according to the transcript of a prerecorded video message.
"In this context it is not surprising that claims that countries would be better off outside the euro find a sympathetic audience."
While any long-term fix was likely to involve "deeper fiscal integration", Praet made the case for completing the euro zone's banking union immediately with "effective institutions for public risk sharing" - a likely reference to a euro zone-wide insurance scheme for depositors.
Praet will step down as ECB chief economist at the end of the month. He will be replaced by Ireland's current central bank governor, Philip Lane.
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