VIENNA (MNI) – Successful stabilization programs need to consider
growth as well as austerity, European Central Bank Governing Council
member Ewald Nowotny said Thursday.
Speaking at a conference of the Austrian National Bank, which he
heads, Nowotny said, “There is a growing consensus that successful
stabilization programs will need not only an ‘austerity part’ but also a
‘growth part.’ The latter may encompass ‘structural reforms’ with regard
to the labor and the goods and services markets or/and special measures
to fight youth unemployment, e.g. by enhancing vocational training or
launching special job programs.”
“It is possible and necessary to combine consolidation and growth
strategies,” Nowotny continued.
“But one has to be aware that there may be different time lags as
to when the different strategies are showing effects. This could create
‘credibility gaps.’ To overcome these gaps is the role of external
policy intervention…But it is important, as has been underlined
frequently, also by ECB President Mario Draghi, that strategies to
restore confidence and to ensure refinancing are consistent, oriented
toward the long term and based on a reliable political support by the
country concerned.”
Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
[TOPICS: M$X$$$,MT$$$$,MGX$$$,M$$CR$,M$$S$$,M$$EC$]