No urgent need or space for fiscal expansion in much of euro zone: Weidmann

[May 18, 2016]  BERLIN (Reuters) - Many euro zone countries do not have the leeway or urgent need to boost fiscal spending, so they should focus on reform instead to lift their growth potential, Jens Weidmann, the head of Germany's Bundesbank said on Wednesday.

An expansionary monetary stance is currently appropriate but should not be maintained longer than absolutely necessary because the negative side effects are increasing with time, Weidmann told Reuters before departing for the G7 summit in Japan.

"Expansive monetary and fiscal policies will not be able to boost growth in the long run," said Weidmann, who also sits on the European Central Bank's Governing Council.

He added he didn't see "the urgent need, nor the required space in many countries" for an expansive fiscal policy.

(Reporting by Gernot Heller; Writing by Balazs Koranyi; Editing by Catherine Evans)

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