Tags: ECB | Nowotny | euro | Crisis

ECB’s Nowotny Cautiously Optimistic That Crisis to Ease in 2013

Friday, 28 Dec 2012 07:11 AM

Measures taken this year by policymakers to address the economic crisis in the eurozone allow for cautious optimism regarding 2013, European Central Bank rate-setter Ewald Nowotny said on Friday.

Nowotny welcomed the launch of a permanent rescue fund for struggling eurozone countries, a framework for common bank supervision by the ECB, and a deal to continue supplying aid to Greece.

"Altogether these are important measures that allow for cautious optimism for a way out of the crisis in 2013," Nowotny said in a statement.

His stance chimed with comments on Thursday by German Finance Minister Wolfgang Schaeuble, who said in a newspaper interview the worst of the debt crisis appeared to be over.

Both men also stressed the need for eurozone states to stick with tight fiscal policies.

Schaeuble said he was optimistic France would press on with its efforts to stop its debt burden expanding.

Nowotny, who also heads Austria's central bank, said the government in Vienna needed to bring down its public debt level, which he expected to rise to 75 percent of gross domestic product next year.

"In the eyes of the central bank this level is clearly too high. It is therefore crucial to continue pushing for consolidation," he said. "We hope that this path will not be abandoned in 2013, an election year."

Nowotny also said he expected Austrian inflation to fall below 2 percent in the next two years amid signs of an economic upturn.

Schaeuble said he expected Germany's economy to expand at a decent rate next year, underpinned by exports to countries outside the eurozone.

© 2015 Thomson/Reuters. All rights reserved.

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