President Centrale Bank wil economische hervorming eurozone (en)
The eurozone needs to undergo far-reaching structural reforms if its long-term economic health is to be guaranteed, the president of the European Central Bank (ECB) has said.
Speaking at the Brussels-based European Policy Centre on Monday (8 October), Jean-Claude Trichet i said the 13-nation eurozone economy is being adversely affected by the lack of structural reforms.
"The need of reform is clearly signalled by the fact that the euro's potential output growth appears to have moved to the lower bound of its previously estimated range of 2-2.5%," he said.
While he welcomed the renewed attention that eurozone members are paying to the problem, he stressed that more should be done if the EU is to achieve the ambitious economic goals it has set itself under the Lisbon Strategy.
"Reforms are essential in order to raise factor productivity and potential output, to create new jobs, to achieve lower prices and higher real incomes, and to increase the resilience and the flexibility of the economy," he added.
In defence of the stability pact
In an apparent aside to France, Mr Trichet also called on member states to obey the rules underpinning the euro - the so-called Stability and Growth Pact (SGP).
"The rigorous implementation of the Stability and Growth Pact is something for us that is absolutely essential," he said.
He added that although it would be "too simple" to say that the pact's rules are constantly breached, he conceded that this is a "tendency in some member states".
His words come as France has backtracked on a general commitment to balance its budget by 2010, indicating it will only do so two years later.
Mr Trichet also addressed the need for the completion of the single market, particularly in the services sector which represents over 70% of the eurozone's GDP.
"We still have significant progress to make in this domain, despite the fact that the single market was the goal of the founding fathers of the European Union," he said.
In his list of the eurozone's main problems, Mr Trichet did not include the euro's current strength on exchange markets, despite mounting fears that the rising strength of the currency is hurting exports and slowing growth.