GO
Loading...

Enter multiple symbols separated by commas

Central Banks Alone Can't Fix Europe: Weidmann

Politicians must act to combat Europe's financial crisis because central banks can't do it alone, Jens Weidmann, the president of the Bundesbank, Germany's central bank, said Tuesday.

"We face a structural crisis in Europe. We face a crisis of confidence, and this can only be overcome if politicians really tackle the root causes," Weidmann told CNBC in an interview.

"Monetary policy can only buy time at best. ... In that sense, I am a bit concerned about some of the expectations around the power and potential of monetary policy actions."

Weidmann said central bank actions had blurred the line between monetary and fiscal policy during the crisis.

"We should quickly revert to our core business, which is monetary policy," he said.

He added that he was skeptical about the prospect of further stimulus measures helping small and medium-size enterprises, particularly in Europe's peripheral nations.

On a separate note, Weidmann described France as the "test case" for Europe's new budgetary rules.

"I don't think France is a crisis country. … France is now the test case for the new budgetary rules, the strengthened Stability and Growth Pact, and our hope is that the pact is applied in a very strict manner," he said.

(Read More: Bundesbank Tells France to Stick to Budget)

Weaker-than-expected growth has forced France's socialist President Francois Hollande to relinquish his original deficit target for 2013.

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Europe Video

  • UK polls show race tied

    Who's going to walk into 10 Downing Street as the U.K.'s Prime Minister? Damian Lyons Lowe, CEO of Survation, weighs in with his thoughts on the U.K. party leaders.

  • Europe shares end mostly higher as euro rallies

    European equities closed mostly higher on Wednesday as investors reacted to a slew of earnings reports and new economic data, as the euro rallied against the dollar.

  • UK elections: Who's better for business?

    Ahead of the UK elections, Bill O'Neill, head of the UK investment office at UBS Wealth Management, talks about which UK political party would be better for business, especially with the heated discussion on an EU referendum.