ECB’s Orphanides: Citizens would back euro zone debt controls

Euro zone citizens would support giving authorities the power to limit national governments' spending, ECB governing council member Athanasios Orphanides said on Thursday, adding that a failure to bring the debt crisis under control was making people poorer.
In a November working paper published on the Web site of the central bank of Cyprus, Orphanides said ordinary people would back new euro zone wide limits to prevent governments running up debts.
"In a democracy, it cannot be ruled out that from time to time an elected government may not be predisposed to behave as responsibly as circumstances demand," he said.
"The issue then is to improve the governance of our democratic societies, putting checks in place that would protect the citizens of all states in the euro area from the potential of irresponsible behaviour of this kind."
"I am confident that citizens in every euro area state would support improvements in this area."
Orphanides also said the crisis had not changed the view that central banks needed to focus on keeping inflation at a reasonable level and that they should not try and be too active with their policy.
The failure to bring the debt crisis under control was hurting those who live in the euro zone's debt-strained countries.
"As a result of the crisis, euro area governments have collectively made most euro area sovereigns much less attractive to investors outside the euro area."
"At the end of the day, all citizens in the euro area are collectively paying the cost of this inefficiency. As a result of our failure to tackle the underlying problem, we are becoming poorer," the working paper said.