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Void of strategic vision?

May 31, 2012

The president of the European Central Bank has criticized eurozone leaders for not presenting a unified vision of the shared currency bloc's future. He has called for more integration, including a banking union.

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A signboard along a street reading "Eurozone"
Image: Fotolia/pincasso

ECB President Mario Draghi on Thursday called on eurozone leaders to come up with a convincing strategic vision for the future of the 17-nation bloc, calling its current setup "unsustainable."

Addressing a hearing before the Economic Affairs Committee of the European Parliament, Draghi said he would like to know how member states see the future of the eurozone.

"I think the sooner this is specified, the better," he said in his capacity as head of the European Systematic Risk Board, the EU's financial watchdog.

Draghi emphasized that the ECB could not fill the vacuum left by EU governments in the fields of structural reforms or governance. Nor could the bank tackle the problem of a lack of capital and risk aversion currently hampering the markets.

Time to act

The ECB president gave his support to calls for a eurozone banking union, comprising a scheme for joint deposit guarantees and greater centralization of banking supervision.

"The eurozone configuration that we've had for 10 years or so has been considered sustainable, perhaps in a myopic way," Draghi said. "But it's been shown now to be unsustainable unless further steps are undertaken."

Also on Thursday, EU Economics Commissioner Olli Rehn said more austerity was needed to keep the eurozone from disintegrating.

"Default or disintegration will likely cause much greater pain for Europe's citizens than further unpopular reforms," Rehn said.

hg/sms (dpa, AFP)