October 11, 2017 / 9:10 AM / 9 months ago

'Transfer union' could spell end of euro zone: Ifo's Fuest

BERLIN (Reuters) - Turning the euro zone into a “transfer union” in which richer member states are asked to bankroll poorer peers could spell the end of the single currency bloc, the head of Germany’s Ifo economic institute said on Wednesday.

“Euro parliament, euro zone budget, European finance minister - all those things won’t solve the problems of the euro zone but rather aggravate them,” Ifo chief Clemens Fuest told a news conference to outline his recommendations for the next coalition government after an election in September.

“Some are pushing for an expansion of transfers in the euro zone,” he said. “This is dangerous. If we look at what happened in Catalonia, we get a taste of what threatens the euro zone should we turn this currency union into a so-called transfer union: small and wealthy countries will say ‘goodbye’.”

Reporting by Joseph Nasr; Editing by Paul Carrel

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