Growth can go with austerity too, says ECB
Source: Agencies |
May 4, 2012, Friday
|
Print Edition
Print Edition
EUROPEAN Central Bank President Mario Draghi, reflecting growing anxiety among Europeans about their economic plight, yesterday said growth should be at the heart of eurozone policy but it needed to go hand in hand with fiscal austerity.
At a news conference in Spain, one of the countries worst hit by the bloc's debt crisis, Draghi painted an uncertain picture of the eurozone's economy, saying that while it was likely to improve this year, there were risks of decline.
Such weakness should keep a lid on inflation over time, he said, although it would remain above 2 percent this year in the 17-nation currency area.
"The economic outlook continues to be subject to downside risks," he told the news conference in Barcelona, shortly after the bank held interest rates at a record low of 1 percent.
"There are indications that global recovery is proceeding ... We continue to expect the euro-area economy to recover gradually during the course of the year."
Police mounted a heavy presence outside the Barcelona hotel where ECB policymakers were meeting, wary of protests expected against Spanish government spending cuts that are supported by the ECB.
Draghi said there was "absolutely no contradiction" between pursuing a growth pact and pushing ahead with Europe's already-agreed pact on budget discipline.
"I certainly agree with your question when you say we have to put growth back at the center of the agenda, without any contradiction with the need to continue, persevere in fiscal consolidation," Draghi said.
Draghi helped shift the tone of the economic policy debate in the eurozone last week when he advocated a "growth compact" without spelling out exactly what he meant.
Voters and investors are becoming disillusioned with the German-led call for austerity - summed up in the budget-constraining "fiscal compact" - as the currency bloc slides back into recession.
The ECB has pumped more than 1 trillion euros (US$1.3 trillion) into the financial system in recent months, smoothing debt issuance for eurozone members. But Spanish bond yields jumped at a debt auction held as the 23-member ECB Council met, though demand was solid.
Draghi insisted that the time was not right for the ECB to consider pulling back on some of its crisis-fighting policies, dubbing such an idea "premature."
Draghi is under pressure to limit the ECB's role from Bundesbank chief Jens Weidmann, who wants countries to put their finances in order and not eye the ECB.
"A consistent budget clean-up and determined structural reforms are the best growth policy, because that way trust is achieved and economic performance is strengthened," Weidmann told the German weekly newspaper Die Zeit.
At a news conference in Spain, one of the countries worst hit by the bloc's debt crisis, Draghi painted an uncertain picture of the eurozone's economy, saying that while it was likely to improve this year, there were risks of decline.
Such weakness should keep a lid on inflation over time, he said, although it would remain above 2 percent this year in the 17-nation currency area.
"The economic outlook continues to be subject to downside risks," he told the news conference in Barcelona, shortly after the bank held interest rates at a record low of 1 percent.
"There are indications that global recovery is proceeding ... We continue to expect the euro-area economy to recover gradually during the course of the year."
Police mounted a heavy presence outside the Barcelona hotel where ECB policymakers were meeting, wary of protests expected against Spanish government spending cuts that are supported by the ECB.
Draghi said there was "absolutely no contradiction" between pursuing a growth pact and pushing ahead with Europe's already-agreed pact on budget discipline.
"I certainly agree with your question when you say we have to put growth back at the center of the agenda, without any contradiction with the need to continue, persevere in fiscal consolidation," Draghi said.
Draghi helped shift the tone of the economic policy debate in the eurozone last week when he advocated a "growth compact" without spelling out exactly what he meant.
Voters and investors are becoming disillusioned with the German-led call for austerity - summed up in the budget-constraining "fiscal compact" - as the currency bloc slides back into recession.
The ECB has pumped more than 1 trillion euros (US$1.3 trillion) into the financial system in recent months, smoothing debt issuance for eurozone members. But Spanish bond yields jumped at a debt auction held as the 23-member ECB Council met, though demand was solid.
Draghi insisted that the time was not right for the ECB to consider pulling back on some of its crisis-fighting policies, dubbing such an idea "premature."
Draghi is under pressure to limit the ECB's role from Bundesbank chief Jens Weidmann, who wants countries to put their finances in order and not eye the ECB.
"A consistent budget clean-up and determined structural reforms are the best growth policy, because that way trust is achieved and economic performance is strengthened," Weidmann told the German weekly newspaper Die Zeit.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
