ECB's Coeure Tells FT EU Fiscal Union Is a `Necessity'

ECB executive board member Benoit Coeure said an interest rate cut was “discussed at the last governing council meeting” and that he “would expect the next council to discuss it again,” Financial Times reports, citing an interview.

  • NOTE: ECB is scheduled to hold its next rate-setting meeting on July 5
  • Coeure says while he supports using EU’s bailout fund to intervene in govt bond markets as a stopgap measure, he is not eager for ECB to take that role
  • Securities Markets Program isn’t considered “the best instrument to use at the current juncture” because it’s not advisable to “mix the central bank with the fiscal authorities”
  • Says sees increased economic integration in EU as essential step toward stability
  • Coeure says his answer to people in doubt about “the necessity of fiscal union” is that if they want to keep euro, have benefits that euro has brought, they have to make steps towards fiscal union
  • Europe is in third year of economic crisis, reaching a point where “deeper questions are being asked”; central to questions is shape of future banking, fiscal union to bolster monetary union
  • Without such strengthening, “the system will not be stable and we will continue to experience crises”

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