FRANKFURT (MNI) – The Eurozone is expected to pull out of recession
in the second half of 2013, European Central Bank President Mario Draghi
said in an interview Friday on France’s Europe 1 radio station.

Draghi said the ECB’s updated forecasts to be released next week
would give a “full picture” for 2013 and 2014. He pointed to the ECB’s
current forecasts as signalling that a recovery in the euro area as a
whole “would start probably in the second half of 2013.”

Asked if that means the dark clouds over Europe will be lifted in
2013, Draghi responded: “I hope so.”

Draghi welcomed the Eurogroup’s decisions on Greece this week,
saying the deal’s “major contribution” was to put Greece on the path
toward debt sustainability. He also highlighted the “commitment of the
leaders to intervene further, to finance further in future if Greece
will have a primary surplus.”

The agreement, announced early Tuesday morning, will “give Greece a
chance to continue its reforms,” Draghi said. Asked if this meant Greece
would remain in the Eurozone, he responded “the answer is yes.”

Draghi also said the time had arrived for European leaders to
deepen their integration efforts in all areas, including towards
banking, fiscal, economic and political union.

“This is the time for a supplementary effort,” which includes
learning to share more sovereignty, Draghi said.

Draghi stressed that the ECB remains ready to act as necessary, and
with “no limit,” though he reiterated this did not mean without
conditions on governments. He noted, “we should not forget how we
arrived at our present situation.”

Draghi defended the fiscal consolidation measures being enacted by
Eurozone governments as “inevitable” after years of wrong policies, even
if “it is certainly true that fiscal consolidation results in a short
term economic contraction.”

That contraction should be cushioned by structural reforms to boost
competitiveness “as quickly as possible.” There is also a need to
“reduce rigidity” in labor markets as well as in products and services,
he said.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com

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