On Air Now

Current Show

Coast to Coast AM   12:00 AM - 6:00 AM

Call Coast to Coast now at 1-800-825-5033

Show Info »

Upcoming Shows

Program Schedule »


Listen Live Now » 590 AM Kalamazoo, MI


Current Conditions(Kalamazoo,MI 49001)

More Weather »
56° Feels Like: 56°
Wind: SW 9 mph Past 24 hrs - Precip: 0”
Current Radar for Zip


PM Thunderstorms 78°


Scattered Thunderstorms 63°


Scattered Thunderstorms 63°


Tough part still ahead in debt marathon: ECB's Weber

By Matthias Inverardi

DUESSELDORF (Reuters) - ECB policymaker Axel Weber said on Monday that debt-strained euro zone countries must make the most of the breathing space bought by aid measures and warned the hardest part of the reform process was still ahead.

Weber, who earlier this month said he was stepping down from the Bundesbank and ruled himself out of the running to become the next ECB president, compared the austerity drives by countries like Greece, Ireland, Portugal and Spain to running a marathon.

"The fiscal stabilisation measures (of EU/IMF) have bought time. Time that has to be used," Weber said in a speech given at the Nordrhein Westfaelischen Academy of Economics and Arts in Duesseldorf.

"If compared to a marathon, the problem countries have made it through perhaps the first 10 or 15 kilometers. In my experience of running these kind of distances, I can say that the most painful moments come at a later point."

Weber added that the euro remained a stable currency and said the euro zone debt crisis was down to overspending by individual countries rather than a fundamental problem with the single currency.

He said that while bailing out countries such as Greece and Ireland had been necessary the impact of those decisions had been profound.

"As necessary and justifiable as the choices may have been, one has to admit, however, that the fiscal stabilisation measures have shaken and fundamentally damaged the foundations of monetary union."

Countries that need to repair their finances need to make the choice of going through the necessary pain or else accept they will have to pay higher borrowing costs on financial markets, Weber said.

There was also a message to euro zone politicians to bring in tough new debt rules when they finalize details of the region's post-2013 fiscal safety net in the next couple of months.

"Aid should be tied to a strict consolidation program. In my view it should be seen positively that aid should only be given after a unanimous decision by those countries providing the help that it should have preference over the rest of the sovereign debt except for IMF credits," he said.

Having hit out at the ECB's own government bond purchase program last year, he also opposed the idea currently being debated by policymakers that the soon-to-be-finalized euro zone safety net could issue common euro zone bonds.

"The crisis mechanism should not become the gateway for institutionalized transfer payments within the currency union," he said.

Bonds issued jointly by euro zone countries would give "fatal incentives for creditors and debtors" he added, also warning against euro bonds and using crisis fund money to fund debt buy-backs by the respective high-debt countries.

(Reporting by Marc Jones; editing by Stephen Nisbet and Susan Fenton)