ECB’s Nowotny: Growth next year; unemployment peak in 2011

Austrian central banker Nowotny says that growth should return to the eurozone in 2010 but unemployment may not peak until 2011. He says growth next year will be “too feeble” to prevent rising unemployment.

Debt reduction must be the focus on economic policy once the crisis is over, Nowotny says. He also says that Austrian banks may be required to hold higher capital ratios by the market (presumably due to heavy exposures to Eastern European credits).

EUR/USD has turned higher after a dip, now at 1.4235, boosted by the S&P 500 which is back in positive territory, though only modestly.