VIENNA (MNI) – The signals coming from the latest forecasts for
European economic developments are “quite positive” even if a slowdown
cannot be ruled out, European Central Bank Governing Council member
Ewald Nowotny said Monday.
The head of the Austrian National Bank opened a conference by
saying that “the signals coming from the most recent forecasts for the
European Union are quite positive and the first quarter of 2011 has
shown improvements that were larger than expected.”
He continued: “The outlook for the global economy has also
improved, and this synchronicity might lead to further positive
reinforcement effects for the European economy.”
“One cannot exclude the possibility of a slowdown in recovery, but
I think that the risks of an L-shaped or a W-shaped development have
decreased,” he added.
Nowotny called the German economic picture “particularly
encouraging” but noted the poorer performance of the periphery. This
divergence is “of course worrisome” but not a reason not to focus on the
problems, he said, observing that the average EU performance was good
during and after the crisis.
There should be “much more emphasis on appropriate anticyclical
policies during periods of upswings,” he urged, calling it “probably
wise” to take a gradualist approach to institutional reform.
The “more immediate task,” however, is to reduce debt levels and
ensure that public finances are on a sustainable path, he said.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
[TOPICS: MT$$$$,M$$EC$,M$X$$$,MGX$$$,M$$CR$]
