— Political Authorities In Europe And U.S. Must Act Now
TOKYO (MNI) – Expansive monetary policies are currently the only
growth driver for the ailing global economy, Swiss National Bank Thomas
Jordan said Saturday during a press briefing at The Annual Meetings of
the International Monetary Fund and World Bank.
“The global economic outlook over the past 12 months has darkened,”
Jordan warned. “Development of the global economy must be assessed as
being subject to uncertainty and prone to set-backs.”
“Central banks are currently the only driving force for global
growth,” Jordan observed and warned that this cannot be sustainable.
“The onus is now on governments.” Structural reforms and fiscal
consolidation must be carried out “with urgency,” he demanded.
Risks stem particularly from the Eurozone, where “there is
still uncertainty about the crisis management mechanism,” Jordan said.
Specifically, question marks remain over the conditionalities of
possible new European Central Bank bond market interventions, he noted.
Jordan also singled out the “fiscal cliff” in the U.S. as a key
risks for the global economy ahead. Political decision makers in Europe
and the U.S “must act now because time is short,” Jordan said.
Swiss Finance Minister Eveline Widmer-Schlumpf, who also attended
the briefing, warned that “the euro area remains the epicenter of risks
and uncertainty, and much more remains to be done to restore market
confidence and reverse capital flight from the periphery.”
In this context, the Swiss finance minister welcomed the “recent
announcement by the ECB” aimed at to prevent financial market
fragmentation and to eliminate convertibility risks.”
–Frankfurt bureau tel.: +49-69-720 142 Email: jtreeck@mni-new.com
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