One of the founding fathers of the European monetary union has criticised central banks, including the European Central Bank, for their use of zero interest rates in a bid to stimulate growth.

In an interview with the BBC, the ECB’s first chief economist Professor Otmar Issing said the policy was hindering the recovery of banks.

"If it persists for longer, then I think we will see dramatic consequences for insurance companies and pension schemes."

He said that "the longer zero interest rates continue, the more difficult it will be to exit from this situation". He believes that a gradual increase in interest rates would not stop companies investing for growth.

With regards to the euro currency, he said it was “stable and performing much better than expected[…]but I wish I could say the same about the euro area.”

He told the BBC that it was a "mistake in the construction of the whole arrangement that once a member, you remain a member for eternity". It means that countries not complying with the eurozone's economic and budgetary rules "can blackmail the others".

He said allowing a temporary exit would, for example, have helped Greece to reform its economy so that it could then return later in better financial health. However, he added that some countries should never have joined the euro in the first place, but he did not disclose any names.

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