Economy & Finance

ECB’s Nowotny cautiously optimistic about 2013

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VIENNA (Reuters) – Measures taken this year by policymakers to address the economic crisis in the euro zone allow for cautious optimism regarding 2013, European Central Bank ratesetter Ewald Nowotny said on Friday.

Nowotny welcomed the launch of a permanent rescue fund for struggling euro zone countries, a framework for common bank supervision by the ECB, and a deal to continue supplying aid to Greece.

“Altogether these are important measures that allow for cautious optimism for a way out of the crisis in 2013,” Nowotny said in a statement.

His stance chimed with comments on Thursday by German Finance Minister Wolfgang Schaeuble, who said in a newspaper interview the worst of the debt crisis appeared to be over.

Both men also stressed the need for euro zone states to stick with tight fiscal policies.

Schaeuble said he was optimistic France would press on with its efforts to stop its debt burden expanding.

Nowotny, who also heads Austria’s central bank, said the government in Vienna needed to bring down its public debt level, which he expected to rise to 75 percent of gross domestic product next year.

“In the eyes of the central bank this level is clearly too high. It is therefore crucial to continue pushing for consolidation,” he said. “We hope that this path will not be abandoned in 2013, an election year.”

Nowotny also said he expected Austrian inflation to fall below 2 percent in the next two years amid signs of an economic upturn.

Schaeuble said he expected Germany’s economy to expand at a decent rate next year, underpinned by exports to countries outside the euro zone.

(Reporting by Georgina Prodhan- Editing by John Stonestreet)

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