Chief economist of ECB quits, calling for drastic changes
(12 September 2011 – Europe) European Central Bank (ECB) chief economist Juergen Stark resigned abruptly on Friday after making his differences with the European Union (EU) and euro zone policy makers known.
According to the German Daily Handelsblatt, Mr Stark wrote in a commentary released by the paper that a 'quantum leap' is necessary 'at the European level' to reinforce its institutions.
'A large reform of decision-making mechanisms and sanctions' is necessary in order to secure in the future effective coordination of economic and fiscal policies of the euro zone countries, he added.
'We find ourselves in a situation where risks to public budgets undermine financial stability,' wrote Stark.
The ECB released a statement soon after Starks fast departure stating he had resigned "for personal reasons" before the end of his term of office in May 2014.
Stark has been critical of the bank's controversial program of buying bonds of euro zone countries who find themselves unable to affordably borrow on the markets.
A day after US President Barack Obama unveiled a $US447 billion ($423 billion) jobs plan to energise the world's largest economy, Stark came out against any similar measures in Europe.
Given the concern over the high debt levels of euro zone countries, any policies which result in new public spending would be counterproductive, he argued.
'A fiscal stimulus would do nothing but increase debt levels and therefore increase risks further,' wrote Stark.
He instead called for sound fiscal policies that would restore investors confidence in the euro zone.
'A large reform of decision-making mechanisms and sanctions' is necessary in order to secure in the future effective coordination of economic and fiscal policies of the euro zone countries, he added.
'We find ourselves in a situation where risks to public budgets undermine financial stability,' wrote Stark.
The ECB released a statement soon after Starks fast departure stating he had resigned "for personal reasons" before the end of his term of office in May 2014.
Stark has been critical of the bank's controversial program of buying bonds of euro zone countries who find themselves unable to affordably borrow on the markets.
A day after US President Barack Obama unveiled a $US447 billion ($423 billion) jobs plan to energise the world's largest economy, Stark came out against any similar measures in Europe.
Given the concern over the high debt levels of euro zone countries, any policies which result in new public spending would be counterproductive, he argued.
'A fiscal stimulus would do nothing but increase debt levels and therefore increase risks further,' wrote Stark.
He instead called for sound fiscal policies that would restore investors confidence in the euro zone.
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