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Germany Will Pay to Rescue the Euro: Bank CEO
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CNBC EMEA Head of News
European Finance Ministers refused to agree on an increase of the European Financial Stability Facility in Brussels on Tuesday, sending debt in some high yielding euro zone debt higher.
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Germany will pay to save the euro, the CEO of Erste Bank said. |
Many analysts have said that expanding the EFSF will be a crucial step in fighting the crisis that has engulfed the euro zone since Greece had to be bailed out in the spring of last year. But EU leaders are divided over the issue.
Expanding the EFSF is not the right solution, said Andreas Treichl, the CEO of Erste Bank, the Austrian-based bank focused on lending in Eastern Europe. Treichl added that one way or another, Germany will ultimately end up picking up the bill.
"I don't see the call from leaders to address the real problem. Europe has lived off the income of future generations for too long," Treichl told CNBC in an exclusive interview.
"Germany will have to pay - no question about it. That’s why they struggle to find a common solution," he added.
The crisis' negative effects are visible, Treichl said. "There is no clarity of direction for the euro.....that is bad."
Erste Bank is a big investor in Eastern Europe and Treichl said the investment case for the region is much stronger than that further east, or south.
“I can give you ten good reasons to invest in Czech Republic, I would struggle to give any for Greece of Portugal," Treichl said.
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