News / Europe

Europe's Chief Banker Says Eurozone 'Unsustainable'

President of the European Central Bank Mario Draghi reports to the Economic Committee, in capacity as the head of the European Systemic Risk Board, at the European Parliament in Brussels, May 31, 2012.
President of the European Central Bank Mario Draghi reports to the Economic Committee, in capacity as the head of the European Systemic Risk Board, at the European Parliament in Brussels, May 31, 2012.
VOA News
Europe's chief banker says the current operation of the 17-nation euro currency bloc is "unsustainable" and that it must create a new vision of how it will manage its affairs in the coming years.

The head of the European Central Bank, Mario Draghi, said the financial institution has done what it could to combat the eurozone's two-year government debt crisis. But he told the European Parliament in Brussels on Thursday that the currency union's individual countries needed to strengthen the eurozone's structure to control spending and boost Europe's stagnant economy.

He said the way the eurozone has evolved since its 1999 founding "has been shown to be unsustainable." Draghi called for a new eurozone mandate.

"The next step is to basically for our leaders really to clarify what is the vision for a certain number of years from now. How is he euro going to be, to look like in a certain number of years from now? What is the union vision that you have a certain number of years from now? And I think the sooner this is specified the better it is," he said.

The bank chief said that too often European leaders had taken half-steps in attempting to deal with the debt crisis, such as in the recapitalization last year of the Franco-Belgian bank Dexia and now the $24 billion bailout of the debt-ridden Spanish bank Bankia.

"I think what Dexia shows, and Bankia shows as well is that whenever we are confronted with the dramatic need to recapitalize, if you look back, the reaction of the individual governments, countries, supervisors, national supervisors is first to say, underestimate the importance of the problem, then come out with a first assessment, then a second, then a third, then a fourth, and this has been the experience I would say everywhere," he said. "If you look at it, all countries have done exactly the same thing. That is the worst possible way of doing things, because you end up, obviously everybody ends up doing the right thing but at the highest possible cost and price, so I think I urge really all governments to keep this in mind, that it's better to, in a sense err because of too much at the very beginning, rather than err by saying too little."

The eurozone is facing several imminent problems, the chief of which is whether economically troubled Greece stays in the currency bloc or becomes the first to leave it. Greece's mid-June parliamentary elections have effectively become a referendum on its eurozone membership.

Meanwhile, the Madrid government is struggling to figure out how to finance its takeover of Bankia, beset by billions of dollars in unpaid real estate loans.

In Washington, International Monetary Fund chief Christine Lagarde was set to meet with the deputy Spanish prime minister, Soraya Saenz de Santamaria, about the country's economic plight. The IMF said there are no plans for a Spanish bailout. But a business newspaper, the Wall Street Journal, reported that the IMF's European division has started to develop contingency plans in case Spain needs funds to complete the bank takeover.


Some information for this report was provided by AP, AFP and Reuters.

You May Like

Kurdish Party Pushes Political Gamble to Run in Turkey Poll

HDP announces it will run as political party instead of fielding independent candidates in June election, but faces tough 10 percent threshold More

Twitter Targets Islamic State

New research shows suspending Twitter accounts of Islamic State, its supporters has been effective; group, its backers are facing 'significant pressure,' says terrorism expert More

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

Majur Juac made the leap from being a refugee in Africa to a master chess champion in US, where he shares his expertise with students More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA Monitors Earth’s Vital Signs From Spacei
X
Rosanne Skirble
January 27, 2015 5:05 PM
The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Saved By a Mistake - an Auschwitz Survivor's Story

Dagmar Lieblova was 14 when she arrived at Auschwitz in December 1943, along with her entire Czech Jewish family. All of them were to die there, but she was able to leave after several months due to a bureaucratic mix-up which saved her life. Now 85, with three children and six grandchildren, she says she has a feeling of victory. This report by Ahmad Wadiei and Farin Assemi, of RFE/RL's Radio Farda is narrated by RFE’s Raymond Furlong.
Video

Video Weekly Protests in Korea Keep Japanese WWII Atrocities Alive

Every week in Seoul protesters gather in front of the Japanese Embassy to demand an apology and reparations from Tokyo for the thousands of South Korean women who were forced into prostitution during World War II. Although this year marks the 70th anniversary of the end of the war, these protestors have helped keep the issue of comfort women alive and made it difficult for Japan to move beyond its past wartime atrocities. VOA's Brian Padden reports from Seoul.
Video

Video Exercise: New Prescription for Parkinsons Disease

Exercise could be the new prescription for Parkinson's Disease, a progressive disorder of the nervous system that affects movement. More than six million people worldwide suffer from Parkinsons and they're traditionally treated with medication and surgery. Shelley Schlender has more.
Video

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Greece’s youngest-ever prime minister, 40-year-old Alexis Tsipras, was sworn in Monday after his victorious far-left Syriza party entered a coalition with far right rivals. Tsipras says he will restore dignity to Greece by ending spending cuts. So begins a new chapter for the country at the epicenter of Europe’s economic crisis - a change that has sent tremors across the continent, as Henry Ridgwell reports from London.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Oil Price Drop Troubles Texas Producers

As oil prices have fallen over the past several months, drilling operations have slowed in some parts of the United States - including Texas, the state that surpasses all others in energy production. The Lone Star State’s energy output has been boosted in recent years by development of resources trapped deep below ground in the Eagle Ford shale deposit, which stretches across south central Texas. As VOA’s Greg Flakus reports from Karnes City, Texas, the drop in oil prices has created concerns,
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid