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


    Get the best of CNBC in your inbox

    › Learn More

Europe Video

  • A yes vote in the upcoming Scottish independence referendum could lead some insurers to move their headquarters to London, says Mark Nicholson, associate director at Standard & Poor's Rating Services.

  • The U.S. Federal Reserve remains data dependent and will not bow to hawks, says Mark Haefele, global chief investment officer at UBS, as Janet Yellen continues to make the argument that there is slack in the labor market.

  • European shares closed lower on Friday as tensions in Ukraine flared up once again. It comes after stocks fluctuated as U.S. Federal Reserve Chair Janet Yellen spoke about the labor market in Jackson Hole, Wyoming.