ECB’s Draghi warns that differences are a threat to the … – Reuters

By John O’Donnell and Axel Bugge

SINTRA, Portugal, May 23 (Reuters) – The marked structural differences between countries in the euro area could undo the monetary union, warned Saturday the president of the European Central Bank, Mario Draghi <. / p>

The Franks Draghi comments address a growing divide between countries like Germany, which seek to balance their spending against their revenues, and debt-laden Greece, which refuses to economic reform.

“In a monetary union, you can not have large and growing structural differences between countries. They tend to become explosive, “said Mario Draghi told an audience of academics and members of central banks.

“So will I threaten the existence of the union, monetary union,” he said.

The differences in the cultures of the 19 countries that make up the currency bloc, from Cyprus, close to the Middle East, Ireland and Finland in the north, often have spread to the management of their economies.

For example, labor laws and the degree of protection against job loss are different depending on the country in which you live.

There have been growing tensions within the euro area due to the financial crisis necessitated the emergency bailout of countries including Ireland, Portugal and Greece.

Germany has tried to persuade countries to follow their conservative approach to spending, while others accuse Berlin of doing too little to boost the bloc’s economy by refusing to provide loans for investment.

(Editing by Patrick Abusleme Spanish)

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