Commerzbank AG Chief Executive Officer Martin Blessing said Europe can’t afford to bail out countries such as Italy, which needs to salvage itself.
“Italy needs drastic political measures,” Blessing told reporters in a speech at the Hamburg club for business journalists last night. “Italy must rescue itself.”
Europe’s debt crisis, which started in Greece and has also led to bailouts for Portugal and Ireland, threatens to engulf larger countries such as Italy, Spain and France as their borrowing costs increase. European leaders have persuaded bondholders to take 50 percent losses on Greek debt and also boosted the firepower of the region’s rescue fund to 1 trillion euros ($1.4 trillion) to try to stop the crisis from spreading.
The amount of “medication” Europe has is limited, Blessing said, adding that the region may need “to amputate” some countries and “focus on the ones that are not so sick.” Greece needs “a big” and “rigorous” reduction of its debt, he said. Blessing also said that the eurozone needs one fiscal policy, and not the 17 it has now.