* German economy to return to growth in Q1
* Reforms needed to avoid becoming "sick man of Europe"
* Politicians not ECB must address firms' access to capital
BERLIN, Feb 25 Germany's economy will return to
growth in the first quarter of this year after contracting in
the final three months of 2012, European Central Bank board
member Joerg Asmussen said on Monday, echoing similar comments
he made to Reuters last week.
But Europe's largest economy needed to reform or risk
becoming the "sick man of Europe" again in five to 10 years, as
it was branded in the late 1990s, Asmussen added in a speech.
"Early indicators ... point to a swift recovery (in Germany)
and I would expect that we will see a return to positive
quarterly growth already in the first quarter of the year,"
Asmussen said at a German savings banks event.
Asmussen told Reuters in an interview on Friday he expected
German gross domestic product (GDP) growth in the first quarter
to be "significantly better" than the 0.6 percent contraction in
the fourth quarter when low exports and investments had an
"That Germany is doing so well today is the result of the
reforms of the past five to 10 years, and the name those reforms
go by in the world is the 'Agenda 2010'," Asmussen said,
referring to labour market reforms by Merkel's Social Democrat
predecessor Gerhard Schroeder.
Germany still urgently needed to reform its education system
and integrate migrants into the labour force, an even more
important challenge as the German population ages, said the
central banker and former German deputy finance minister.
It needed to ensure energy provision, modernise its tax
system, address growing income inequality and make sure new
infrastructure could be built and existing infrastructure
maintained, he added.
Germany has faced a range of high-profile embarrassments
over flagship projects that have run hugely over budget, have
been delayed or have faced popular opposition, such as Berlin's
planned new airport and a train station in Stuttgart.
Asmussen said while access to capital was no concern for
German medium-sized companies - where only 15 percent of firms
feared for their access in a recent study - it still remained a
worry for firms elsewhere in the euro zone. However, this was
down to politicians, not the ECB to address.
"(One) reason why banks don't offer credit is high risk
aversion, for instance driven by a rising number of
non-performing loans," Asmussen said.
"I believe that is a serious topic, but mostly for
politicians. The ECB looks after liquidity for solvent banks,
but we are not in charge of other aspects," he added.