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Bank boss calls for EU finance minister

The Local · 21 Aug 2011, 13:35

Published: 21 Aug 2011 13:35 GMT+02:00

"We need a real European finance minister with the appropriate powers," Blessing wrote in a guest column in Sunday's Welt am Sonntag newspaper.

He said the recent summits between Chancellor Angela Merkel and French President Nicolas Sarkozy had produced unsatisfactory results, opening the door to a continued lack of confidence in the markets.

The top bank manager said there were only two ways out of the current debt crisis: a return to national currencies, or fiscal unity for the European Union.

Blessing said the idea of a common economic government was the first step in the right direction, but that it was currently not being implemented forcefully enough.

"The instruments in place up till now have just bought time, but have not addressed the fundamental problems of the currency union," he wrote.

"But if we come to the conclusion that all our efforts cannot create a stable legal and political framework for our common currency, we should not shy away from abandoning the euro," he wrote.

He said that only strong institutions with the power to intervene in the budget sovereignty of individual euro-states would help. He said only this would force national governments to stick to financial conditions.

Blessing also suggested the EU should be allowed to impose taxes, and to construct a common debt agency to issue government bonds.

Story continues below…

The Local/bk

The Local (news@thelocal.de)

Your comments about this article

14:35 August 21, 2011 by storymann
In the months and years to come, you can expect to see Germany start to focus more on what is best for Germany - to the exclusion of what is best for Europe - even though that self-interest will come at the expense of the rest of Europe.

Germany is going to be far less likely to agree to additional bailouts for other European countries. In fact, the era of unlimited access to Germany's hefty balance sheet is just about over.

The Euro, a great idea, works best for exporting nations as it keeps the value of the currency in check but does little to improve the weaker economies that would benefit from a currency devaluation.

I think the present system of buying what in reality are junk bonds from heavy indebted nations by the ECB a huge mistake. This may give a temporary relief to the currency but in the end these countries are going to go bankrupt and those bonds which are the only collateral the ECB has is going to send the ECB down the same road.
14:46 August 21, 2011 by maxpayne
I wonder if this new minister will be as effective as the High Representative of the Union for Foreign Affairs and Security Policy (aka EU Foreign Minister).
15:46 August 21, 2011 by Sastry.M
Technically speaking Herr Blessing's suggestions may truly reflect his genuine intentions as an economist under the present troublesome conditions. However, it may not address the national characteristics of different European people ailing with debt problems.

Although many European nations have simply adopted Roman script in common for their respective languages the Promissory Bank Notes of Euro currency has caused friction in negotiating individual financial transactions among themselves. Coupled with prevailing economic depression threatening even a powerful and self sustaining nation like the U.S and the ignorance of people at large feeling honored by percentages of statistical surveys and kept up credit ratings one can never realize the root cause of all these confounding crises baiting with lure for wishful wealth than view with sound economic health.

Hence Herr Blessing's suggestions may be construed as an indictment saying "Ein Geld, eine Union, ein Minister"!
20:43 August 21, 2011 by wxman
What a terrific idea! Let's put the entire German economy in the hands of some foreigner. I know, how about a Greek?
20:58 August 21, 2011 by nec123
Turkey did not join The EU.... Thanks God...! NO EU...! NO EU...! NO EU...!
00:07 August 22, 2011 by lwexcel
I remember saying as far back as 3 years ago that the Euro was simply a foundation for a monetary system that is more centralized throughout Europe, and would bind the member states economically much like each state in the United States. I also remember all but a couple of people stating 'that would never happen' and giving excuses such as culture, language, etc. etc.... Well....this is me gloating ;-)
08:25 August 22, 2011 by Traveler33
The problem with Europe is because of the Euro, the countries that are in trouble are unable to fix their current debt problems because they are tied to each other with the same currency. Greece could solve a lot of their problems by just devaluing their currency, but they can't do that because of the Euro.

The Euro was a great experiment and it worked for a while, but without a unified financial system, and government the idea just won't work in practiciality. We are seeing that now play out with Greece, Portugal, Spain and Ireland and soon Italy.

Countries need the opportunity to lower their currency like the US did by printing more dollars, these countries can't solve their current problem because they are tied to the Euro.

So Germany and France had better get used to financing these countries or just go back to their own currency's again and let those countries fend for themselves again.
19:32 August 23, 2011 by Nutt
The United States of Europe needs an Alexander Hamilton.
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