Euro Survival 'Silly' Question: Ex-ECB Board Member
Web Producer, CNBC.com
The question whether the single European currency will survive the current crisis is a "silly" one because the present situation created opportunities to actually make the monetary union stronger, Otmar Issing, president of the Center for Financial Studies and a former ECB board member told CNBC Thursday.
Various analysts but also investors have predicted the demise of the euro. Famous investor Jim Rogers said the single currency will likely break up in the next 15-20 years.
"It will survive, this is a silly question," Issing said when asked whether the euro will withstand the headwinds it is faced with.
"The crisis gives a chance to make improvements for the future," he said, adding that the European Union has survived and progressed by learning from various crisis situations it went through and adapting to them.
Euro zone periphery countries, such as Greece, Ireland, Portugal and Spain have seen growth stalling and public debt spiraling following the financial crisis, sparking fears that the stronger members such as Germany and France will have to bail them out.
Greece has already benefitted from a bailout package worth 110 billion euros ($146.6 billion) from the European Union and the International Monetary Fund.
When the monetary union was launched some 10 years ago, the periphery countries were growing faster but had a higher inflation rate, while the Economist was running a headline calling Germany "the sick man of Europe," Issing recalled.
"What went wrong was that the same countries that stayed above inflation and the same that stayed below created this divergence in competitiveness," he said.
"The ECB has to deliver on its mandate on delivering price stability," he added.
The current crisis has demonstrated that the EU needs rules on fiscal discipline at a national level, Issing said.
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