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

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces a Chaotic World and the Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid