Bundesbank Says Deficit Countries Are Source of Danger for EMU

Germany’s Bundesbank said euro-area countries with high current-account deficits are a “source of danger” for the single-currency region.

Since 1999, Greece, Portugal, Ireland and Spain have run up “persistently high” current-account deficits, the Bundesbank said in its monthly bulletin published today. “These macro- economically erroneous trends don’t only cause an increased economic and financial vulnerability of the respective countries,” but also are “a source of danger for other member countries and the currency region as a whole.”