Draghi says no risk of eurozone deflation, recession-update

ECB head calls for structural reforms by government

(ANSA) - Rome, September 24 - European Central Bank President Mario Draghi said Wednesday that he sees no risk of recession or deflation across the eurozone - but inflation will remain muted for an extended period.
    "The eurozone is not in recession but recovery is modest, weak and fragile," he said in an interview with Europe 1 radio.
    Italy, the eurozone's third-largest economy, is in recession and in August reported deflation as the consumer price index slipped into negative territory.
    Unemployment remains a greater risk to the eurozone than deflation, said Draghi.
    And he repeated his call for structural reforms by government, saying that monetary policy can help growth by injecting cash - but that alone is not enough.
    Rigid bureaucracies, high taxes, and red tape that ties up businesses strangle growth and discourage the new investment essential for economic expansion, said Draghi.
    "We can guarantee all the credit possible, but if in some countries it takes a young entrepreneur months before obtaining permits and authorizations to open a new store, in the end he will not request credit," Draghi added.


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