FRANKFURT, April 14 (Reuters) – Budget problems in the euro zone could have severe consequences for interest rates, economic growth and stability, European Central Bank Executive Board member Juergen Stark said on Wednesday.
“A continuation of high public sector borrowing without the credible prospect of a return to sustainable public finances could have severe consequences for long-term interest rates, for economic growth, for the stability of the euro area and, therefore, not least for the monetary policy of the European Central Bank,” Stark said in a preface to an ECB research paper on euro zone fiscal policies in the wake of the financial crisis, dated April 2010.
For a copy of the paper, please see:
here (Reporting by Marc Jones)
