By Jonathan Spicer
NEW YORK Oct 14 Janet Yellen, the nominee
expected to run the U.S Federal Reserve beginning next year,
regularly warns at meetings of the world's central bankers that
short-term unemployment can evolve into more permanent
"structural" unemployment, a top European Central Bank official
said on Monday.
"When central bankers meet every two months in Basel
(Switzerland), the one central banker who has spoken out very
strongly about this message is Mrs. Janet Yellen," said Ewald
Nowotny, a member of the ECB's Governing Council.
"We are fortunate that such a central banker" is doing so,
he told students at Columbia University in New York. "If you
have a policy of high unemployment for too long a time then
short-term unemployment may development into structural
Last week U.S. President Barack Obama picked Yellen, the
Fed's current vice chair, to succeed Fed chairman Ben Bernanke
Since the financial crisis and Great Recession, Yellen has
strongly defended the U.S. central bank's unprecedented efforts
to spur growth and get Americans back to work. As vice chair,
she often represents the Fed at meetings with ECB and other
central banks in Basel
U.S. unemployment reached as high as 10 percent in 2009 but
has since has fallen to 7.3 percent. In Spain and Italy, by
contrast, unemployment remains at 26 percent and 12 percent,
Giving few specifics on where ECB policy might head, Nowotny
said reducing high unemployment in some southern euro-zone
countries is a "top priority."
"We have a growing divergence between some member
countries," he said. "We have a number of countries in the south
that for years now have had negative growth rates, that have
high unemployment rates."
But "what one has to be aware of on the other hand is it's
not something that monetary policy" can solve alone, Nowotny
said. He said reforms are needed in labor markets and elsewhere
to solve it.