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ECB's Weidmann sees no "big leap" toward EU fiscal union
December 21, 2012 / 8:36 AM / in 5 years

ECB's Weidmann sees no "big leap" toward EU fiscal union

FRANKFURT (Reuters) - European Central Bank Governing Council member Jens Weidmann expects little progress toward a European fiscal union because there is little political will to relinquish national sovereignty, he was quoted as saying in an interview.

President of German Bundesbank Jens Weidmann reacts on the podium during the Frankfurt Euro Finance Week in Frankfurt November 19, 2012. REUTERS/Lisi Niesner

“I do not see the big leap toward fiscal union,” Weidmann said in an interview with German magazine Wirtschaftswoche published online.

Weidmann, who also heads Germany’s Bundesbank, warned against pooling risks without addressing the issue of sovereignty that a fiscal union would entail.

“If responsibility and control are not aligned, it would undermine the currency union,” he said.

Weidmann repeated previous objections to the ECB’s bond-buying program for crisis-struck euro zone states, saying, “We have embarked on a slippery slope.”

Once a country slips into crisis and requires ECB support through the program, it would be difficult for the ECB to then withdraw its support should the country depart from reforms agreed to as a condition for the support, he was quoted as saying.

“We should interpret our mandate narrowly and not even put ourselves in such a predicament in the first place,” he said.

Reporting By Thomas Atkins

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