Debt in the euro zone has entered the “danger zone,” said the head of Deutsche Bundesbank Jens Weidmann on Friday. He also said Greece is running out of time. Weidmann stated that in the euro zone public debt is at 91 percent and corporate debt at 105 percent, according to Reuters. “Sovereign debt needs to be backed by capital, and exposure to a single sovereign must be capped, just as is the case for any private debtor,” said Weidmann, who also sits on the European Central Bank’s Governing Council. Regarding Greece’s debt, Weidmann said, “I don’t buy the argument that they are financially overburdened.” Speaking to Germany’s Focus magazine, the Bundesbank president said he was against an increase in emergency loans to Greece. He accused the new government of losing a lot of trust with creditors. “Until last autumn, an improvement in the economy could be seen. But the new government has gambled away a lot of trust,” he was quoted as saying. On the subject of Greece losing trust, Weidmann elaborated: “Generally speaking, I get the impression that the statements given by various members of the government can be very different, depending on the day and the audience. Ultimately, that doesn’t inspire much confidence.” Asked whether Greece was in imminent danger of default, Weidmann replied: “Clearly, the governments of the other countries have the impression that a solution can be found. But we don’t have a lot of time.” He added that if a member of the common currency bloc decides not to meet its commitments, “then a disorderly default cannot be ruled out.”
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