ECB's Draghi On Debt Crisis: 'Worst Is Over,' But Risks Remain

   on March 22 2012 2:00 PM
The European Central Bank (ECB) President Mario Draghi
ECB President Mario Draghi REUTERS/Alex Domanski

The head of the European Central Bank says the worst of the euro zone's credit crisis is over.

In an interview posted online late Wednesday by Germany's Bild Zeitung daily, ECB President Mario Draghi said the bank will act swiftly to counteract risks from inflation.

The worst is over, but there are still risks, Draghi was quoted as saying. The situation is stabilizing.

Key economic indicators such as trade balances and budget deficits in the euro zone are better than in the United States, for example, he said.

According to Draghi, the newspaper said, inflation in the euro zone has remained 1.5 percent for several months if oil prices and recent tax increases aren't counted.

In February, rising energy prices drove up the cost of living across the euro zone, with inflation rising to 2.7 percent. 

Should the inflation outlook deteriorate, we will act immediately and preventively, the central bank chief said.

Draghi said that despite the critical nature of the crisis, investor confidence is returning. He stressed that the ECB hasn't had to step in recently to buy sovereign bonds of any state in the 17-member currency zone.

The ball is now in the governments' courts, he said, referring to euro zone members. They should act make the euro zone permanently crisis-proof, Draghi said.

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