Central Bank President Warns That Euro Is Unstable

The president of the European Central Bank warned Thursday that the set-up of the European currency is unsustainable. In some of the harshest remarks by a senior European official to date, Mario Draghi criticized the vacuum resulting from the lack of action by European governments.

Copyright © 2012 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.


This is ALL THINGS CONSIDERED, from NPR News. I'm Melissa Block.


And I'm Robert Siegel. The euro needs a vision - that was the message today from European Central Bank president Mario Draghi, speaking before the European Parliament. He warned that the current plan backing the single currency is unsustainable.

And as NPR's Sylvia Poggioli reports, governments may have to make some tough choices to keep the eurozone intact.

SYLVIA POGGIOLI, BYLINE: Draghi's remarks were among the harshest by a European official since the eurozone crisis erupted three years ago. Draghi said the crisis has exposed the inadequacy of the financial and economic framework set up for the single currency in 1999. The European Central Bank, Draghi said, cannot fill the vacuum resulting from the lack of action by national governments. He urged leaders to come up with a vision of what the euro is going to look like some years from now.

The ECB president compared Europe's current disarray over euro policy to a person crossing a river in a thick fog, while struggling against a strong current. He or she continues fighting, Draghi said, but does not see the other side. What we are asking is to dispel the fog.

The single currency, used by 17 countries, was set up without a common economic and fiscal policy, one of the main causes of the current debt crisis in the eurozone. Draghi suggested, as a first step, tighter central control over banks through a banking regulator that could force banks to restructure and take over the burden of bailing them out.

Draghi's comments come at a time of mounting anxiety over the possible impact of a Greek euro exit, as well as increasing calls for a shift from strict austerity policies - as dictated by Germany - to a more pro-growth strategy.

Sylvia Poggioli, NPR News.

Copyright © 2012 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.



Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.