FRANKFURT, March 19 (Reuters) – The Middle East war is an economic drag for Europe and should serve as a wake-up call for more integration, including joint debt issuance, to build up the bloc’s capacity to withstand shock, Greek central bank chief Yannis Stournaras said.
The EU has long debated further steps to bring the bloc closer together but most efforts, like the creation of a banking or capital market union, have largely failed due to opposition from a few.
“Within a period of a few months, there have been more than one wake-up calls to European policy makers that institutional changes are imperative,” said Stournaras, who sits on the European Central Bank’s Governing Council.
Among key reforms, he highlighted the need for the bloc to borrow jointly to lower costs and collectively finance projects that impact all nations.
“Our objective should be to issue joint debt to pursue well-defined common European purposes of high importance, such as enhancing defence, green energy, and strategic investment,” he said.
(Reporting by Balazs Koranyi; Editing by Hugh Lawson)
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