FRANKFURT--European leaders should not ease the rules for sovereign debt in Europe, European Central Bank executive board member Benoit Coeure said in an interview with German newspaper Frankfurter Allgemeine Zeitung.
"The Stability and Growth Pact should not be stretched to the point where it loses its credibility," Mr. Coeure said in the interview, which is due to be published in the newspaper on Sunday.
Given the high level of debt in Europe, this is not the time to back down consolidation efforts, Mr. Coeure is quoted as saying.
The appeal is aimed particularly at French President Francois Hollande, who repeatedly suggested softening the rules of the Maastricht Treaty. Mr. Hollande is due to meet withsocial democratic party leaders in Europe, including the German Vice Chancellor Sigmar Gabriel, on Saturday in Paris.
Party leaders are hoping to compel German Chancellor Angela Merkel to make concessions in matters related to savings, leading economists to be alarmed.
"We should soften rules but by no means the Stability and Growth Pact. That would be poison for Europe's economic recovery," Marcel Fratzscher, President of the German Institute for Economic Research, tells the newspaper.
The president of the Center for European Economic Research, Clemens Fuest, called for a "credible insolvency procedure for countries in the euro zone." Individual countries could raise debt if they want to but "not at the expense of the taxpayers of other countries," he added.
Write to Neetha Mahadevan at Neetha.email@example.com
(END) Dow Jones Newswires
June 21, 2014 09:25 ET (13:25 GMT)
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