Automatic sanctions to discipline fiscal offenders in the euro zone are preferrable to setting constitutional debt brakes, ECB Governing Council member Yves Mersch (photo) told Greek newspaper Real News on Saturday.
“It would be preferrable to put more emphasis on automatic sanctions to achieve the Maastricht criteria instead of being led to an intergovernmental accord to change the constitution of every country, which could prove even more slow (to reach) than even a treaty,” Mersch, Luxembourg’s central banker, told the paper in an interview.
He said the euro zone was not facing a crisis of the euro as a currency but a fiscal crisis in several countries which need to take tough measures to tackle their problems.
Mersch reiterated the ECB’s call for a larger and more flexible European Financial Stability Facility (EFSF) as well as tougher euro area rules “to avoid fiscal profligacy and excessive debt.”
“More ambition than is contained in the EU Commission’s current proposal for reform is warranted. Last but not least, macroeconomic imbalances should be prevented and corrected at an early stage,” Mersch argued.
Turning to the Greek adjustment program, Mersch said that Greece had made “impressive” achievements in fiscal policy. However, “some tensions are evident in budget implementation, in particular shortfalls in revenue collections, and problems with spending control,” Mersch said.
“The program has been designed to address these problems, and the work is progressing,” he noted. “For the future, it will be crucial to comply with the economic adjustment program. “
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