ZURICH (Reuters) - European Central Bank policymaker Juergen Stark sees the euro zone crisis over in the next year or so as politicians have started to realize the need for painful action.
“I assume that in 1-2 years at the latest the crisis will be under control, if not overcome. Overcome in the sense that acute political actions are no longer necessary,” he told a conference in the central Swiss city of Lucerne.
“I don’t know if this policy of ever more and ever bigger rescue packages is the solution. Because at the end they burden those countries that now are still more or less solid,” he said.
Stark, who will step down from the bank’s six-strong Executive Board at the end of the year, contrasted political support in Ireland for necessary reforms with the current turmoil in Greece.
“Here there was the political consensus between the big political parties in Ireland that one needs to push through the necessary reforms. That for too long one lived beyond one’s means. Ireland, as we’ve seen, is on a good path,” he said.
He added he was concerned by growing protectionism, including via exchange rate interventions, that he said had not been sufficiently addressed by the G20.
Stack has criticized bond buying by the ECB, which has increasingly come into focus as the debt crisis has deepened due to uncertainty about Greece’s future in the euro zone. Many analysts see ECB bond buying, and the firepower it could unleash, as the only way to steady markets.
Stark’s opposition to the ECB’s bond buying is based on a belief, shared by many at the central bank, that the onus should be on the crisis-hit countries to make economic reforms and on fears that ECB market intervention, which can reduce government borrowing costs, could reduce their incentive to reform.
Reporting by Catherine Bosley, Editing by Chizu Nomiyama