–Italian 2Q GDP Growth In Line With Eurozone Average
ROME (MNI) – Eurozone economies must achieve strong, sustainable
growth in order to assure the solvency of governments, European Central
Bank Governing Council member Mario Draghi said Wednesday.
It is no longer possible for governments to count on low German
yields to keep their own borrowing costs down, the governor of the Bank
of Italy said in a speech to the Italian Banking Association here.
“The solvency of sovereign states is no longer a given, but must be
earned with strong and sustainable growth — possible only when the
finances are in order,” Draghi said, explaining that the stronger
economies can no longer “lend credibility” to the weaker ones.
Tensions on financial markets remain acute despite the decisions
taken by the Greek parliament and the Eurogroup, partly reflecting the
“natural inertia” of the political process, Draghi noted.
It is “indispensable” for the bailout countries to pursue the
significant efforts they have made, he said. “There is no alternative in
any country to credible fiscal consolidation; this is an essential
precondition for reinforcing growth prospects.”
At the European level, the management of the financial crisis must
be solidified by setting clear political objectives, designing
instruments and mobilizing resources, he said.
Turning to the domestic economy, Draghi noted the support offered
by a solid banking system and expanding global trade: “After six months
of barely positive growth, Italy’s GDP should expand in the second
quarter at a rate in line with the Eurozone average.”