German finance Minister Wolfgang Schaeuble called for greater integration between euro zone members and stronger surveillance of member countries' finances to protect the monetary union from further crisis.
In a column published in the Financial Times, Schaeuble said Europe's monetary union was facing a critical moment and must take steps to protect itself from a new crisis.
“The fallout from the crisis is becoming ever more visible, labour markets in some countries are languishing and government debt almost everywhere is far in excess of permissible deficit limits,” Schaeuble wrote.
“There is only one course of action: all eurozone members must return to adherence to the stability and growth pact as rapidly as possible.”
“Co-ordination between euro members must be more far-reaching; they must take an active part in each other's policymaking.”
Greece is battling a debt crisis and EU policymakers have been debating ways of providing financial support for it and other troubled euro zone members.
German politicians have pushed the idea of a rescue fund which euro zone countries could tap on tough conditions if they faced default. Questions over who would finance such a fund remain unanswered.
Yves Mersch, European Central Bank Governing Council member and Luxembourg central bank chief, made clear on Thursday that the ECB would not provide emergency funding for countries in a budget crisis.
Schaeuble said any aid offered would be subject to strict conditions, but could improve the EU's ability to sort out its backyard problems without the help of the IMF.
“The prospect of emergency aid connected with hard corrective fiscal action would boost the confidence of financial markets, thus preventing a deepening of the crisis and obviating the eurozone members' need to call upon the IMF in future.”
Schaeuble echoed the calls of Eurogroup Chairman Jean-Claude Juncker for euro zone finance ministers to step up their surveillance of countries' finances.
“Economic and fiscal policy surveillance in the Eurozone was insufficient to prevent undesirable trends in a timely manner,” he said.
“From now on, a member state with an excessive deficit should not receive EU cohesion funds if it is not making sufficient savings.”
Referring to Greece, which provided the bloc with false economic statistics, Schaeuble said the EU statistics office, Eurostat, should be given increased powers to inspect public finances.
Schaeuble, finance minister of Europe's largest economy, urged calm and said decisive handling of the crisis would help to strengthen the credibility of the ECB.
“If we are successful in putting fiscal policies in the member states back on the right course, the crisis will have brought about a change for the better.”