BEIJING (Reuters) - No euro zone member states will be allowed to quit the currency bloc, European Central Bank Governing Council member Yves Mersch said in an interview published on Monday in the China Business News.
The interview, published in Chinese, quoted Mersch as saying it would be unrealistic, as well as financial suicide, for any states to leave the bloc when they did not have other working currencies to fall back on.
Euro zone policymakers have been battling to contain a debt crisis that threatens to enter a dangerous new phase by engulfing larger nations on the region’s periphery, with the ECB stepping in last week to buy Italian and Spanish bonds in an attempt to calm frazzled markets.
“Leaving the euro area is not an option for any member country,” Mersch told the publication in an English-language transcript of the interview.
Governments should work harder to keep public finances healthy, Mersch, who also heads the central bank of Luxembourg, said.
“It is the responsibility of governments to bring public finances back onto sustainable tracks,” he said.
Mersch said excessive volatility in currency markets was harmful to the economy, though the ECB did not target a specific exchange rate.
Mersch also said it had necessary for the ECB to raise interest rates in April and July to control inflation, and well-anchored inflation expectations helped keep long-term interest rates low.
China Business News said it interviewed Mersch last week when he visited Beijing.
Reporting by Zhou Xin and Koh Gui Qing in Beijing and Sakari Suoninen in Frankfurt; Editing by Jacqueline Wong, John Stonestreet