The European Central Bank will start phasing out the measures it took to boost liquidity at the height of the crisis and it cannot cater to the needs of individual countries with problems, Axel Weber, ECB governing council member, told CNBC Wednesday.
Mcihael Probst
** FILE ** Euro coins fall out of the hands of a person in Frankfurt, central Germany, Feb. 4, 2007. The euro set an all-time high against the dollar Friday, April 27, 2007, buying US$1.3682 as fears about a U.S. economic slowdown mounted amid signs of weak growth. L(AP Photo/Michael Probst)
"It is the normalization of our liquidity framework. We cannot take in our decisions developments in certain parts of the Union, because we do not have tools for that," Weber told "Squawk Box Europe."
But the economy is still not standing on its own feet, so fiscal and monetary expansionary measures must be withdrawn only gradually, he added.
Critics of the European Monetary Union said the euro's straightjacket was hurting weaker members such as Greece, Ireland and Portugal, which struggle with high debt and weak growth and that they could benefit from a looser monetary policy.
Greece's debt problems have lately knocked down the euro against the dollar and the pound.
But Weber said the single European currency was not in danger.
"There is no problem of credibility of the euro over the last 10 years," Weber said.
- Watch the full interview with Axel Weber above.
"At the core, this is a healthy economy and there is no problem with the currency whatsoever. I expect the euro to be there forever," he said.
The euro zone had to work on improving its competitiveness and trade unions must negotiate salaries in a way that take into account relocation dangers, he said, repeating previous ECB stances that member states must solve their own problems.
Greece is likely to meet its ambitious target to cut its deficit from 12 percent of gross domestic product to 3 percent of GDP in the next 2 years, even if it will be very painful, according to Weber.
"My expectation is they (Greece) have to meet it because they have no alternative," he said.
