MEXICO CITY (Reuters) - The euro zone political commitment to the euro should not be underestimated, European Central Bank Executive Board member Benoit Coeure said on Friday in a warning to those doubting the single currency’s survival.
In a speech in Mexico City, Coeure said there was a lack of understanding about the euro zone’s approach to tackling the debt crisis and that he disagreed with those who said the bloc did not have the right tools to fix the situation.
“I would caution those who have doubts about the euro, that they underestimate the political commitment to it at their own risk,” Coeure said.
“The ambition to provide long-term foundations for EMU in less than a decade is a historical step of great significance,” he added.
He added that the euro zone would remain a cornerstone of the international economy and that euro zone leaders had “clearly understood that the time of partial solutions and piecemeal reform is over”.
He underscored the bloc’s decision to give the ESM permanent bailout fund the ability to capitalize banks directly, a move he described as “crucial to break the vicious circle between banks and sovereigns that is at the heart of the crisis”.
In addition he said short-term measures were clearly needed to help growth and soften the blow from austerity.
Writing By Eva Kuehnen and Marc Jones in Frankfurt