European Central Bank president Mario Draghi has called on the bloc’s member states to rebuild trust between each other by sticking to the rules of economic and monetary union in a bid to prevent “transfers” from stronger to weaker nations.
In his latest push for further eurozone integration, the central bank chief said governments should not be hampered by the “legacy of past failures”, and called on them to stick to the eurozone’s budgetary rules and reform their economies to strengthen the foundations of the single currency area.
Combined, these moves would mean “sharing risks does not create permanent transfers between countries” – a key concern in major creditor countries such as Germany, which has protested against being on the hook for bailouts, the latest of which was agreed with Greece in 2015.
In a speech in Ljubljana on Thursday, Mr Draghi warned that “perceptions of insecurity are on the rise” in the eurozone, while the “severity of the euro crisis has weakened faith in the EU as a foundation of economic security”.
To some, it is no longer self-evident that closer union provides the answer. Integration is viewed in some quarters as a source of insecurity rather than a bulwark against it. One country has even decided that it is better to reverse that process than continue
But Mr Draghi ramped up his calls for greater institutional unity, citing figures which show the EU’s GDP per head would be 20 per cent lower if no integration had taken place since the second world war.
Image via Reuters