ECB's Draghi says dangers of imbalances are now clear

PARIS Fri Nov 30, 2012 4:28am EST

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PARIS (Reuters) - European Central Bank President Mario Draghi said on Friday that the scale of the euro zone crisis had demonstrated the dangers of allowing large current account imbalances to build up within the single currency bloc.

"The crisis has made one thing absolutely clear: large imbalances within the euro area can become a fundamental issue for the stability of economic and monetary union," Draghi said during a conference in Paris with top financial officials.

"It is inevitable that a union of sovereign states can become fragile, to say the least, if some states are permanent creditors and others are permanent debtors," Draghi said, noting that there were now signs of improvement in reducing imbalances.

(Reporting by Daniel Flynn and Leigh Thomas; Writing by Catherine Bremer)

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