BERLIN: The euro-zone crisis cannot be solved with monetary policy measures and swift implementation of the EU summit's decisions is crucial, European Central Bank policymaker Juergen Stark was quoted as saying by German weekly WirtschaftsWoche.
Stark said he was stepping down as an executive board member of the ECB at end-year because he was not satisfied with the way the situation in the euro zone had developed, alluding to pressure on the bank to take more decisive action to stem the two-year sovereign debt crisis.
Previously, he had mentioned only "personal reasons" for leaving the bank, though sources had said he was quitting over his opposition to the bank's bond buying programme.
Stark told the magazine in an interview to be published in its Monday edition that the ECB had consistently, and in a timely manner, warned the euro-zone of problems over the past few years.
Politicians had paid little heed but now expected the bank to solve the crisis.
"Don't ask too much of the central bank," Stark said, adding that further bond purchases by the ECB would not end the crisis.
The ECB is at the centre of a fierce political tug-of-war, resisting with Germany's backing calls from France, Italy, the United States, Britain and Russia to respond to the euro-zone debt crisis by being more forceful in its bond buying.
Stark said such calls displayed a lack of understanding of the European institutional framework.
"It is the fundamental arrangement of this currency union that it does not allow the monetary funding of sovereign debt by the ECB," he said. "Without these rules, there would be no economic and currency union."
He said the ECB had already bought around 210 billion euros worth of state debt since May 2010.
"This instrument is limited in terms of the time frame and volume, we cannot indefinitely expand our balance sheet."
Last week ECB President Mario Draghi dashed hopes the bank was gearing up for a more aggressive approach to bond purchases, saying comments he had made that if leaders agreed to more shared spending and debt rules "further elements might follow", had been wrongly read as code for increased ECB bond buying.
The ECB actually slashed purchases of government bonds to little more than half a billion euros in the run-up to the EU crisis summit.
Stark said that markets expected short-term solutions to the crisis and these were necessary for Italy to refinance its debt.
"The swift implementation of the Brussels Dec. 9 summit decisions is crucial," he said, describing them as a "veritable breakthrough". "Italy has high refinancing needs, but these must be shouldered," he said. "Italy must create the basis for this itself with a comprehensive programme of reforms and consolidation measures."
Stark also said that Greece was dragging its feet on necessary reforms under the pretext that it was suffering from a systemic European crisis.
"It's not on when you push the responsibility onto someone else if you haven't done your homework yourself," he said.
Comments
Comments are closed.