Charles Dallara, head of the institute of International Finance which represents more than 450 firms, stressed on the threat of excess short-term austerity in Europe as it could hurt growth and thwart recovery.

Despite the increase in the European rescue fund by 500 billion euros in addition to the current 300 billion euros to create a total of 800 billion euros to combat crisis, Dallara said the European permanent rescue fund needs expansion to continue its support to debt-troubled euro area nations.