BUDAPEST (Reuters) - The euro area will move out of recession to a very weak growth this year with continuing differences in performance among various euro zone states, ECB governing council member Ewald Nowotny said on Friday.
Speaking at a central banking conference in Budapest, Nowotny said future growth would depend on structural reforms of labor and products markets but the demand side of the economy must also be taken into account.
“In the present situation of still low capacity utilization in many fields of the economy, of low investment and especially of alarming rates of unemployment in many countries, it seems to be obvious that the demand-side of the economy is also of relevance - and that additional demand cannot be expected to come from ever-increasing current account surpluses of the EU,” Nowotny said.
He said the process of regaining sustainability of public budgets must be strengthened but without threatening the fragile recovery.
Reporting by Jan Lopatka