FRANKFURT (MNI) – The Eurozone will not fall apart, but a recession
cannot be excluded, European Central Bank Governing Council member Ewald
Nowotny said in an interview published over the weekend.
Nowotny, who heads the Austrian National Bank, told Austrian daily
Kronen Zeitung on Friday that “we can overcome this crisis, because a
change in thinking has taken place. We now know that indebtedness has
limits. Hopefully, confidence in the financial sector can emerge again
on this basis.”
As for the single currency, Nowotny said he was “convinced that it
will not fall apart, because it is in the interest of the rich AND the
poor countries. I just hope it won’t come to irrational developments.”
Pressed on whether he really believed the euro would endure, he
said: “That is my absolutely honest personal opinion.”
There will “in any case” be a “massive growth slowdown,” Nowotny
cautioned. No one can say at the moment whether a contraction will
occur, “but a recession…can no longer be entirely excluded.”
Nowotny played down the split at the EU summit Thursday night
between the UK and its European partners, arguing that it was “better to
achieve concrete progress, even if not all 27 [EU] states join in, than
to unite around the smallest common denominator.”
— Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
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