BRUSSELS (MNI) – The economy is recovering from the crisis, but the
recovery is feeble and it is characterized by varying growth rates from
region to region, European Central Bank Governing Council member Mario
Draghi said Monday.
The head of the Bank of Italy told a conference on Financial
Integration and Stability that “although weak, frail and uneven, the
recovery is underway.”
He cited a variety of risks to the outlook, including commodity
prices, divergent economic policies and global imbalances. In this
context, he supported reforms “to make countries undertake economic
policies that would somehow reduce these imbalances, which actually, we
have seen, [are] widening.”
“We know that these imbalances will stay with us for a long time,”
Draghi said. “So they need financing, and they need robust capital
markets…which can be resilient to sudden changes in capital flows, to
pressures on the exchange rates” and to volatile asset prices.
This is “essential to help the recovery to become strong,” he
affirmed.
Having resilient capital markets “in a completely globalized
industry” requires “a consistent regulatory framework,” he said.
Speaking at the same conference, EU Economic and Monetary Affairs
Commissioner Ollie Rehn noted that the programs implemented to deal with
fiscal troubles in Greece and Ireland “are still in the early stages.”
If fiscal consolidation plans are adhered to, he said, a
stabilization and then decline of debt-to-GDP ratios can be expected.
Spain, he said, is recovering “thanks to determined policy action.”
Also at the conference, European Banking Authority Chairman Andrea
Enria promised “stronger, more severe” bank stress tests that would
“tighten the assumptions.” The results of a new round of stress tests
are expected to be published in June.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
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