ECB's Draghi says euro not in danger

Sat Jul 21, 2012 12:26pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

PARIS (Reuters) - The euro zone is not in danger of breaking up despite some analysts' worse case scenarios, European Central Bank President Mario Draghi said, judging that the bloc was inevitably marching towards closer union among its members.

Asked in an interview with French newspaper Le Monde if the euro were in danger, Draghi said: "No, absolutely not. We see analysts imagining the scenario of a euro zone blow-up."

"They don't recognize the political capital that our leaders have invested in this union and Europeans' support. The euro is irreversible," he added.

In the long term, the euro would need to rest on a foundation of greater integration among euro zone countries, Draghi said.

"All movement towards financial, budgetary and political union is for me inevitable and will lead to the creation of new supranational bodies," he said.

European leaders took a step towards greater integration last month at a Brussels summit where they agreed to put the ECB in charge of supervising banks and gave the ESM rescue fund the power to recapitalize troubled banks.

However, the summit provided only brief relief to investors. Concerns about Spain have returned to the fore, driving the country's 10-year bond yields above the 7-percent danger level on Friday.

European and U.S. stocks also fell and the euro hit record lows against the Australian, Canadian and New Zealand currencies in the face of increasing investor fears that the Spanish government may seek a full-blown bailout.

ECB CAN'T FIGHT ALL FIRES   Continued...

 
Mario Draghi, President of the European Central Bank (ECB), addresses the media during his monthly news conference at the ECB headquarters in Frankfurt, July 5, 2012. REUTERS/Alex Domanski