Mario Draghi said there had been dramatic improvements recently but some countries have yet to make the necessary structural reforms
European Central Bank president Mario Draghi has warned that Europe's recovery remains fragile, and renewed the pressure on European leaders to make structural reforms.
Appearing for a Q&A session at the World Economic Forum in Davos, Draghi said there had been dramatic improvements since the eurozone debt crisis eased. But he cautioned: "We are seeing the beginning of a recovery that is still weak, still fragile, and still uneven."
Much of the recovery is based on exports, he added, while jobless rates have not yet fallen from their record highs. The youth unemployment levels in some countries show the need to reform labour markets and increase competitiveness.
Draghi said that some countries, such as Greece, had made meaningful progress on structural reforms while other peripheral nations had not, raising the risk of further instability.
Germany made the necessary reforms a decade ago, he pointed out, but others are lagging.
"We still have some core countries who need to reform – that's not because they did it 10 years ago, but because they've not done it," Draghi said.
The French government announced a wide-ranging economic reform plan earlier this month. And its finance minister, Pierre Moscovici, robustly rejected recent claims in the UK that France had become the "sick man of Europe".
"If being the sick man of Europe is being the 5th economy in the world, with GDP higher than Great Britain, the second economy in Europe, with capacities for education, for innovation, for investment, for creation, well, it's good to be sick," Moscovici told a Davos press conference.
Moscovici insisted he and Francois Hollande are committed to creating more jobs, improving competitiveness and cutting the national debt.
France's economy shrank by 0.1% in the third quarter of the year, and manufacturing surveys have shown falling output.
Moscovici, though, was adamant that the "foolish bashing" of France in some quarters was unfair.
"Saying France is a sick man is a caricature and a prejudice.Saying France needs to improve its economy is the truth, and it's exactly what we're doing," he said.
Draghi also told delegates that the upcoming Asset Quality Review, which will stress-test eurozone banks, should help rebuild confidence in the sector – and suggested some banks could fail it.
"Shedding light on banks' balance sheets should help them raise capital in the markets. And of course banks that should go, should go," he said.
DavosDavos 2014Eurozone crisisEuropeFranceMario DraghiEuropean Central BankGraeme Weardentheguardian.com © 2014 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
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