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The German leader said she hadn’t softened her stance at last month’s summit in Brussels, and that a so-called banking union involving a bloc-wide financial overseer will have to include joint oversight on a “new level”. She chided Member States who had sought to slow moves towards greater central control “since the first summit” in the 2 1/2-year-old crisis.
Germany’s Federal Constitutional Court said it won’t rule on challenges to the region’s bailout fund, the European Stability Mechanism, until September 12, two months after its intended starting date.
As governments in Spain and Italy struggle under the burden of higher borrowing costs, Weidmann, Germany’s chief central banker and a European Central Bank Governing Council member, said that Italy’s higher yields don’t justify a request for bailout assistance. Euro bailout funding should be deployed only as a last resort, he said.
“If Italy stays the course on reforms, it’s on a good path”, Weidmann told the newspaper in an interview. Asked whether the euro area’s third-largest economy needs to tap the fund, he said: “No, I don’t see Italy in that situation”. Italian Prime Minister, Mario Monti, has sought a “debt shield” against spillover from a Spanish banking crisis.