Austria central bank’s Nowotny: must not loosen conditions for euro zone membership


© Reuters. ECB Governing Council member Nowotny addresses a news conference in Vienna

VIENNA (Reuters) – Austria’s central bank chief Ewald Nowotny said on Thursday that the euro zone should not loosen its conditions for membership as it seeks to expand and should scrutinize candidate members’ economies carefully.

European Commission chief Jean-Claude Juncker on Wednesday presented his vision in a state of the European Union speech for a fast eastward extension of the euro zone.

Some French, German and eastern European officials have welcomed Juncker’s ideas but Austria’s government has rejected them, pointing to a need to avoid a repetition of Greece’s debt crisis.

In a statement on the Austrian National Bank’s website Nowotny, who is also a European Central Bank governing council member, said:

“A softening up of inclusion criteria (is) to be rejected strictly in the interest of the long-term stability of the European economy.”

Nowotny said the criteria to join the euro club were mainly inflation rates, long-term interest rates, budget deficits, debt limits, a stable currency exchange rate and judicial aspects such as an independent central bank.

“But as experience has taught us, taking into consideration real-economic criteria is absolutely necessary for concrete decisions,” he said, listing as examples a country’s trade balance, job data and per-capita income.

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