European banking chief: euro needs a central budget

FRANKFURT, Germany (AP) — European Central Bank head Mario Draghi is renewing his pleas to fix flaws in the 19-country euro currency, urging European leaders to adopt a central spending capacity to buffer individual governments against financial crises.

Draghi said Monday in the European Parliament that “the euro area needs a fiscal instrument to help maintain convergence” in the face of sudden shocks like the 2007-08 global financial crisis.

He said that such a fiscal pot needs to be big enough and should deploy automatically when trouble strikes, but must not encourage irresponsible spending by governments.

He said that proposals by the European Commission for an EU fund to support investment spending, and by the French and German governments for a eurozone-only budget within the EU budget, were “first steps.”


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