Oct. 26 (Bloomberg) -- Incoming European Central Bank President Mario Draghi called for “immediate implementation” of the euro area’s rescue fund, warning that it’s up to nations to ultimately solve the sovereign-debt crisis.
Europe needs “immediate implementation of financial support to manage the crisis,” Draghi said in a speech today at a conference in Rome today, referring to the European Financial Stability Facility. “Without a definitive and lasting answer from national” governments “to boost growth and fix public finances,” the debt crisis won’t be solved.
Draghi’s comments come as German lawmakers prepare to back a planned increase in the EFSF, strengthening Chancellor Angela Merkel ’s hand before a Brussels summit today that aims to quell the euro-area debt crisis. The plan aims to bulk up the 440 billion-euro ($612 billion) rescue fund.
Bank of Italy Governor Draghi, who takes over as ECB President on Nov. 1, also said that he sees “significant” downside risks to economic growth in the euro region as industrial output expands at a “very moderate pace.”
While the ECB remains “determined to avoid a poor functioning of monetary and financial markets,” the central bank’s unconventional measures are “temporary by nature,” Draghi said.
Draghi also called on Italian Prime Minister Silvio Berlusconi’s government to immediately implement austerity measures and carry out a planned review of public spending.
Italy’s government-bond yields remain at “very high levels,” which could be reduced quickly through prompt implementation of all required reforms, Draghi said.
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