The euro is in danger due to member states’ runaway spending and the subsequent sovereign debt crisis.
So says a European Central Bank study that is co-authored by its chief economist Juergen Stark, who is quitting as a member the Bank’s Executive Board because he disagrees with some of the ECB responses to the crisis.
“Greatly increased fiscal imbalances in the euro area as a whole and the dire situation in individual member countries risk undermining stability, growth and employment, as well as the sustainability of EMU itself,” the study said.
The research paper, which was published by the ECB but not expressly endorsed by it, also said that countries which do not abide by the agreements should surrender their economic powers to the European Union.
It called for strengthening fiscal governance by, among other measures, “financial receivership where adjustment programmes do not remain on track.”