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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