Jens Weidmann, the president of the Deutsche Bundesbank and member of the European Central Bank's governing council, has written in a forthcoming article that the European Monetary Union must either move to full fiscal union, or allow insolvent member states to default on their debts.

In a piece to be published in Central Banking journal next week, Weidmann says government bonds are not priced correctly due to the "systemic importance" of their issuers – eurozone member countries.

He says that