Bundesbank: Euro crisis not over
Source: Agencies |
March 13, 2013, Wednesday
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Print Edition
Print Edition
THE eurozone crisis is not over, France is slipping on reforms and the Bundesbank has set aside billions in new provisions for what it sees as risky European Central Bank moves, Germany's central bank said yesterday.
Presenting Bundesbank 2012 results that showed a sharp increase in its risk provisions, the German central bank's chief, Jens Weidmann, urged governments to tackle the roots of their troubles with reforms.
Weidmann, a member of the ECB's Governing Council, opposed the bank's yet-to-be-used bond-buy plan agreed last September and believes eurozone governments must shape up their economies to exit the crisis rather than looking to the ECB for help.
"The crisis is not over despite the recent calm on financial markets," Weidmann said.
There was uncertainty about the reform course in Italy and Cyprus, he said, adding: "The reform course in France seems to have floundered."
The ECB's other German policymaker, Joerg Asmussen, late last month urged France to take "concrete and measurable" steps to bring down its budget deficit, saying Paris faced a test of its credibility.
The Bundesbank is concerned about risks the ECB has taken on to help banks through the crisis, for example by accepting lower-rated assets in return for cash, exposing it to larger losses if a bank fails to repay.
The Bundesbank said it increased its risk buffers by 6.7 billion euros (US$8.7 billion) to 14.4 billion euros. Germany, Europe's powerhouse, expanded robustly during the first two years of the eurozone crisis.
Presenting Bundesbank 2012 results that showed a sharp increase in its risk provisions, the German central bank's chief, Jens Weidmann, urged governments to tackle the roots of their troubles with reforms.
Weidmann, a member of the ECB's Governing Council, opposed the bank's yet-to-be-used bond-buy plan agreed last September and believes eurozone governments must shape up their economies to exit the crisis rather than looking to the ECB for help.
"The crisis is not over despite the recent calm on financial markets," Weidmann said.
There was uncertainty about the reform course in Italy and Cyprus, he said, adding: "The reform course in France seems to have floundered."
The ECB's other German policymaker, Joerg Asmussen, late last month urged France to take "concrete and measurable" steps to bring down its budget deficit, saying Paris faced a test of its credibility.
The Bundesbank is concerned about risks the ECB has taken on to help banks through the crisis, for example by accepting lower-rated assets in return for cash, exposing it to larger losses if a bank fails to repay.
The Bundesbank said it increased its risk buffers by 6.7 billion euros (US$8.7 billion) to 14.4 billion euros. Germany, Europe's powerhouse, expanded robustly during the first two years of the eurozone crisis.
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