World Bulletin/News Desk
The euro zone is not in danger of breaking up despite some analysts' worse case scenarios, European Central Bank President Mario Draghi said, judging that the bloc was inevitably marching towards closer union among its members.
Asked in an interview with French newspaper Le Monde if the euro were in danger, Draghi said: "No, absolutely not. We see analysts imagining the scenario of a euro zone blow-up."
"They don't recognise the political capital that our leaders have invested in this union and Europeans' support. The euro is irreversible," he added.
In the long term, the euro would need to rest on a foundation of greater integration among euro zone countries, Draghi said.
"All movement towards financial, budgetary and political union is for me inevitable and will lead to the creation of new supranational bodies," he said.
European leaders took a step towards greater integration last month at a Brussels summit where they agreed to put the ECB in charge of supervising banks and gave the ESM rescue fund the power to recapitalise troubled banks.
However, the summit provided only brief relief to investors. Concerns about Spain have returned to the fore, driving the country's 10-year bond yields above the 7-percent danger level on Friday.
European and U.S stocks also fell and the euro hit record lows against the Australian, Canadian and New Zealand currencies in the face of increasing investor fears that the Spanish government may seek a full-blown bailout.
Draghi poured cold water on the prospect that the ECB could take action to calm the situation, saying that its mandate did not allow the central bank to resolve states' financial problems.
The International Monetary Fund has urged the ECB, which is legally forbidden from financing governments, to play a greater role fighting the crisis, suggesting that it could be given lender-of-last-resort functions.
At the summit in June, EU leaders broadened the ECB's role to include supervising banks in hope that the move would cut the risk that troubled lenders' problems could spread to sovereign borrowers.
Draghi said that the ECB's monetary policy and bank supervisory activities would have to be kept separate in order to avoid conflicts of interest and suggested that an "independent structure" could be built.
Weighing in on the LIBOR rate fixing scandal, he warned that it was undermining confidence in a cornerstone of the global financial system.
Turning to the economic outlook in the euro zone, Draghi said he did not see the risk that the bloc as a whole would enter a recession and that the situation would gradually improve towards the end of the year and the beginning of 2013.
The ECB cut its interest rates to a record low earlier this month to breathe life into the ailing euro zone economy amid signs that inflation pressures were subsiding.
Draghi said that the ECB, which strives to keep euro zone inflation at a rate close to but less than 2 percent, was prepared to take action in the case that the risk of deflation emerged.
Number of tourists across the world rose to all time high of 1.235 billion last year, World Tourism Organization said on Tuesday.
Turkish central bank has announced to open foreign exchange depot market to enhance flexibility and instrument diversity
While PM promises 'greatest possible' access to EU market, opposition hits out at 'clear break' from Conservative policy
Prime Minister Theresa May is expected to deliver Brexit speech on Tuesday
"Net easing of banks' overall terms and conditions on new loans continued across all loan categories," as in previous quarters, the central bank said in a statement.
On a state trip to Hanoi, Japanese PM Shinzo Abe promises to help bolster Vietnam's naval capabilities
The US growth estimate was raised a tenth of a point this year to 2.3 percent, and for next year by four-tenths to 2.5 percent.
Flynas chairman Ayed al-Jeaid said at the signing ceremony in Riyadh that the deal includes an option for 40 more of the short to medium-haul planes in what airline executives said is a growing domestic market.
Central Bank skips repo auctions for third trading day to stem sharp decline in lira value against other currencies
Oxfam pointed to a link between the vast gap between rich and poor and growing discontent with mainstream politics around the world.
US dollar/Turkish lira exchange rate fell to stand at 3.7630
Chancellor Philip Hammond says if Britain is 'closed off' from EU markets, it will be forced to be 'something different'
Government plans to claw back lost VAT revenues splits opinion in austerity-hit country
"It would probably be right if the ECB starts daring to head for the exit this year," Schaeuble told the Sueddeutsche Zeitung newspaper -- although he acknowledged it would be a "difficult task".
There was muted reaction to end-of-the-year data from China showing the world's number-two economy was still struggling on the trade front, with uncertainty over Trump's upcoming presidency.