Thursday 27 April 2017

Paul Carrel: Draghi faces a daunting 2013

European Central Bank (ECB) President Mario Draghi speaks during a news conference in Frankfurt, November 8, 2012. The European Central Bank held its main interest rate at 0.75 percent on Thursday, deferring any cut in borrowing costs while it assesses the extent of the euro zone's economic downturn and waits for a cue to use its new bond-purchase programme. REUTERS/Lisi Niesner (GERMANY - Tags: BUSINESS)
European Central Bank (ECB) President Mario Draghi speaks during a news conference in Frankfurt, November 8, 2012. The European Central Bank held its main interest rate at 0.75 percent on Thursday, deferring any cut in borrowing costs while it assesses the extent of the euro zone's economic downturn and waits for a cue to use its new bond-purchase programme. REUTERS/Lisi Niesner (GERMANY - Tags: BUSINESS)

WITH two short sentences, the head of the European Central Bank took the heat out of the euro zone crisis this year. In 2013 Mario Draghi has to live up to even bigger expectations.

The ECB's own forecasts suggest the euro zone economy will shrink 0.3 percent next year and markets remain sceptical that the bloc's weaker members, such as Spain and Italy, can fund ballooning government deficits without formal aid programmes.







Progress towards closer economic and fiscal union -- deemed essential by policymakers to solve the euro zone crisis -- is likely to be painfully slow in 2013 because two of the bloc's top three economies, Germany and Italy, hold elections.

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