European Central Bank head Mario Draghi says the euro currency union remains “incomplete” and needs to be strengthened with better oversight of member countries’ economic policies to avoid future crises.
Draghi said in the text of a speech Thursday in Helsinki that “for all its resilience, our union is still incomplete.”
He said the 18 member countries have agreed not to bail each other out through fiscal transfers — the way richer and poorer states do in the United States — so they need to find other ways of keeping problems in one member country from affecting them all.
He called for “joint sovereignty” over economic policies and urged tougher use of existing tools such as the annual review of national budgets by the European Union’s executive commission as a way to keep bad economic policymaking from triggering economic trouble in individual countries.
The eurozone is struggling to emerge from a crisis that began in 2009-10 over troubles with government debt in smaller countries such as Greece, Ireland and Portugal and quickly led to fears the currency union might break up. Markets are calmer now and those breakup fears have receded. But the eurozone as a whole is still mired in low growth and high unemployment.
Draghi said it isn’t realistic to expect euro member countries to send each other money to even out imbalances. He noted that such fiscal transfers help keep regional recessions from become national crises in the United States, where richer states persistently send tax dollars to poorer ones.