ECB chief says single currency needs vision

The set-up of the euro currency union is currently unsustainable, the head of the European Central Bank has told European Union leaders, warning they must quickly come up with a broad vision for the future to get through the financial crisis.

Mario Draghi said yesterday that the crisis had exposed the inadequacy of the financial and economic framework that was set up for the monetary union.

In his sharpest criticism yet of eurozone leaders’ handling of the crisis, Mr Draghi urged they spell out detailed plans for the euro and fiscal co-operation, something he believes will require governments to surrender some of their sovereignty in order to succeed.

“How is the euro going to look like a certain number of years from now? The sooner this is specified, the better it is,” Mr Draghi said.

“That configuration that we had with us by and large for ten years which was considered sustainable, I should add, in a perhaps myopic way, has been shown to be unsustainable unless further steps are taken,” he added.

Mr Draghi said the central bank had done what it could to fight the debt crisis by reducing interest rates and giving emergency loans to banks.

However, it was now up to governments to chart a course ahead by reducing deficits, carrying out sweeping reforms to spur growth and by strengthening the euro’s basic institutions.