U.S. Federal Reserve Vice Chair Stanley Fischer on Thursday said the euro zone crisis had made the monetary union stronger and proved that the European Central Bank has the ability to carry out effective policy in the region.
Even though the crisis is not over, with Greece in particular still struggling and facing a possible debt default, the ECB’s actions have “largely, though not totally, erased” any lingering doubt that the euro zone could survive intact, Fischer said at a central banking conference in Portugal. “There can be no one whose … priors have not moved in favor of the survival of essentially the present euro area,” Fischer said.
He said for the crisis to truly end the region faced difficult choices over how to ensure states managed their fiscal policies more responsibly—a dilemma at the heart of the Greek crisis. Restoring economic growth and productivity in the face of a demographic decline will also be important, Fischer said.