Precautions: Eurozone risks ‘relapse into recession’

BRUSSELS: The European Central Bank’s president warned divided euro zone leaders on Friday they risked “a relapse into recession” if they failed to press ahead with structural economic reforms, a message welcomed by German Chancellor Angela Merkel. With a recovery coming to a halt in the second quarter and depressed prices reflecting near record unemployment, France and Italy want to shift away from the spending cuts that marked the bloc’s response to the 2009-2012 crisis. But Germany says debt discipline must continue and the European Commission, which acts as a budget policeman, has until next Wednesday to reject 2015 budgets that fail to comply with EU fiscal rules. France and Italy are pushing for more spending room in their budgets in return for new commitments on structural reforms, and officials say that any changes Paris and Rome make to their budgets are likely to be small.

Published in The Express Tribune, October 26^th, 2014.

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