German central bank head: Reform only crisis fix

[May 26, 2012]  PARIS (AP) -- The head of Germany's central bank says there is no quick fix for Europe's problems, calling appeals for more support from the European Central Bank and plans for investment in infrastructure a distraction from the hard work of reform.

In an interview with Le Monde newspaper Friday, Bundesbank chief Jens Weidmann added that it was an "illusion" to think allowing eurozone countries to borrow money jointly would solve the crisis. He said countries that use the euro would need to combine their budgets before turning to "eurobonds."

He also rejected "project bonds" to invest in infrastructure, saying governments shouldn't increase their debt.

Weidmann implied he wouldn't support another round of low-rate loans to banks from the ECB, calling them "morphine" that "eases the pain but doesn't cure the sickness."

[Associated Press]

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