Euro zone needs fiscal union to withstand future shocks: ECB Coeure

FRANKFURT (Reuters) - Euro zone countries need to pool their fiscal resources and decision making if the euro area is to dispel doubts about its ability to withstand economic shocks, a top European Central Bank policy maker said on Wednesday.

"A pooling of fiscal resources, whatever their nature and size might be, only works if solidarity goes hand in hand with shared responsibility," Executive Board members Benoit Coeure told a committee of the European Parliament.

"A move towards more fiscal risk-sharing in EMU would therefore require a commensurate shift towards increased joint decision-making within strong common institutions."

Coeure said the current euro zone set-up, characterized by fragile public finances in many countries and modest economic growth, "casts doubt on the euro area’s capacity to face future economic shocks".

(Reporting By Francesco Canepa; Editing by Balazs Koranyi)

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