Weidmann launches a debate on the eurozone's future evolution

In a remarkable speech Jens Weidmann yesterday launched a debate in Germany on the eurozone's future evolution, Financial Times Deutschland reports. The Bundesbank president urged the government to quickly decide on whether it wanted to continue on the basis of the existing arrangements or whether it intended to go down the road of a "big leap" towards a fiscal union. "From my point of view a decision has to be taken within a short time", he insisted. Half baked compromises as the euro summit decisions of July 21st threatened to undermine "a stability oriented currency union", he warned. Weidmann's preference clearly is to continue on the present basis by reinforcing the SGP and by increasing the pressure the markets exercise on countries to keep their finances in order. But he said a fiscal union where national parliaments no longer have the last word on the budgets and European authority intervenes is a possibility. The latter however would require a change of the German constitution and would be the result of a "long and difficult path". But Weidmann insisted that both options can be "in principle economically sustainable".