Thursday, May 31, 2012

Eurozone is 'unsustainable' warns Mario Draghi, head of the European Central Bank

The head of the European Central Bank hit out at the political paralysis gripping the region as he warned the eurozone's set-up was "unsustainable".

Mario Draghi said the central bank could not "fill the vacuum" left by member states' lack of action as it was claimed the zone is on the point of "disintegration".

Amid escalating talk of a potential bail-out for Spain, the president of the ECB said the central bank was powerless to stop the debt tornado. "It's not our duty, it's not in our mandate" to "fill the vacuum left by the lack of action by national governments on the fiscal front," he said.

Olli Rehn, the EU's top economic official, called for urgent action to "avoid a disintegration of the eurozone." The economic affairs commissioner said that politicians had made progress but it had been "uneven and seemingly inefficient."
Underling the fears gripping many investors, the FTSE closed down 7.5pc in May, suffering its worst month since February 2009 when the banking crisis was at its height. Read More