ECB's Weidmann Warns against Dangers of Euro Exit
European Central Bank council member and Bundesbank President Jens Weidmann warned in a magazine interview on Wednesday against the dangers of a country leaving the eurozone.
"What vexes me is how recklessly people invoke such a scenario," Weidmann told the German monthly Capital in a pre-release of an interview to be published on Thursday.
An exit from the euro would have grave consequences for the countries affected, as well as for everyone else," the German central bank chief warned.
"Monetary union is not some sort of club, which you can easily quit and then quickly sign up to again.
"Whoever suggests it underestimates the interconnectedness of the different eurozone economies. An exit would also have far-reaching consequences for our banks and companies," Weidmann said.
Weidmann reiterated his reservations about the ECB's bond-buying program, credited with marking a turning point in the eurozone's long-running crisis.
And he also insisted that the central bank's much-lauded decision to issue so-called "forward guidance" regarding the future direction of eurozone interest rates was not the mini-revolution that many said it was.
"We're not tying ourselves to a particular path in interest rates independent of what is going on around us," Weidmann said.
"Forward guidance is an instrument with which we can better communicate our monetary policy course in uncertain times. But it doesn't mark a new era. It will not alter our monetary policy action," he insisted.
In July, ECB President Mario Draghi announced that eurozone interest rates -- already at historical lows -- would remain "at present or lower levels for an extended period of time.
"Our exit (from low interest rates) is very distant."
Source: Agence France Presse
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