Germany’s Council of Economic Experts, which advises Chancellor Angela Merkel, said decisions reached by euro-zone leaders at a summit in Brussels in June will only help the euro zone in the “short term.”
“The European currency union is in a systemic crisis that threatens the survival of the common currency and the economic stability of Germany,” the council said in a statement on its website last night. Decisions made last month “can only stabilize the situation in the euro zone in the short term.”
Euro-area leaders agreed to relax conditions on emergency loans for Spanish banks and possible help for Italy. Chiefs of the 17 euro countries dropped the requirement that taxpayers get preferred creditor status on aid to Spain’s blighted banks. They also opened the way to recapitalizing lenders directly with bailout funds once Europe sets up a single banking supervisor.
The advisers want help for Spain’s banks to be tied to “clear criteria for recapitalization and restructuring,” according to the statement.