U.K. Business Secretary Vince Cable said the European Central Bank needs unlimited powers to support the euro and the region’s debt-ridden economies.
“If a monetary deal’s going to work, the central bank has to have unlimited powers to intervene to support economies, and indeed banks, to prevent collapse,” Cable said in an interview on BBC television’s “Politics Show” today. “They need to have that clearly at a European level, and that’s one of the issues that hasn’t yet been adequately clarified.”
ECB President Mario Draghi has ruled out expanding the bank’s purchasing of sovereign debt even as the region’s fiscal crisis worsens, sending Italian bond yields past the 7 percent level that drove Greece, Ireland and Portugal to seek bailouts. German Chancellor Angela Merkel has expressed opposition to the bank acting as a lender of last resort.
“It’s very clear that in addition to the disciplines that the southern Europeans are going to have to adopt, the Germans are going to have to play their role in supporting the euro zone,” Cable said. “That’s either directly or through the central bank, making absolutely sure that the big countries that are subject to speculative attack are properly supported with adequate liquidity.”
Cable joins Prime Minister David Cameron and Chancellor of the Exchequer George Osborne in pressuring the euro region, the U.K.’s biggest trading partner, to resolve its debt crisis.
“If the leaders of the euro zone want to save their currency then they, together with institutions of the euro zone, must act now,” Cameron said in a speech in London Nov. 10. “The longer the delay, the greater the danger.”
Former Prime Minister Tony Blair called on Europe’s politicians and institutions today to put their entire weight into measures to keep the euro from breaking up, saying that would be “catastrophic” for the continent.
“Right now for the single currency, it is absolutely essential, if it’s to be preserved, that the whole weight of Europe and its institutions come behind it,” Blair said today in an interview on BBC television’s Andrew Marr Show. “You’ve got to have a long-term framework of credibility behind any short-term decision” to prop up the single currency, he said.