VIENNA (MNI) – The decisions made by the European Central Bank have
created some “breathing space” to deal with the crisis, ECB Governing
Council member Ewald Nowotny said Monday.

Speaking on a panel, the head of the Austrian National Bank
affirmed that “markets reacted positively” to the ECB’s decisions and
there is now “a positive perspective” in the crisis even if “a lot
remains to be done.”

“Financial crises usually take five to seven years to end,” he
said. The current crisis “will be overcome” by 2020 and Europe “will
have built the necessary institutions” to have achieved this, he said.

Nowotny he said he was “surprised” about comments made by the
Slovenian president concerning his country’s fiscal position and
suggesting that Slovenia might need financial aid.

Nowotny stressed that he does “not see them needing an aid
programme any time soon”.

On the question of a joint Eurozone banking supervision, he
reiterated that the ECB should “only take on this responsibility once it
is fully prepared.”

It is “extremely dangerous for the reputation of central banks to
go out with half-baked solutions,” he cautioned.

He stressed the need for realism and the “danger of overambitious
plans” leading to “disappointments” if they cannot be fulfilled.

One ambitious aim is for the ECB to be able to oversee large banks
from 2013, he asserted.

Nowotny rejected “painting apocalyptic scenarios” like the failing
of the common currency: “The euro will not fail if no political union in
Europe is reached.”

He said he was sure that the currency “will work, but it will take

–Frankfurt bureau tel: +49-69-720-142. Email:

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