Bernanke Says Some Euro Nations Face Long Period of Slow Growth
February 08, 2012, 11:08 AM ESTBy Craig Torres
Feb. 2 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke told the House Budget Committee that some countries in the euro area could have slow-growing economies “for quite a while.”
The Fed chairman said the European Central Bank’s long-term financing program for the banking system has “taken away some of the financial stress.” European leaders have also made progress on mutual surveillance of fiscal policies, he said.
“There is an awful lot that remains to be done” in Europe, Bernanke said during a question-and-answer period following his remarks to the committee on the U.S. economy. “The banking system remains undercapitalized; it has been contracting its credit, which is contributing to a weakening economy in many countries in Europe.”
Bernanke said the region also has to resolve “deep fundamental problems,” including differences in competitiveness between countries such as Greece and Germany.
“All of those things put together mean you could have very slow growth in some European countries for quite a while,” Bernanke said.
--Editors: Christopher Wellisz, Kevin Costelloe
To contact the reporters on this story: Craig Torres in Washington at ctorres3@bloomberg.net.
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
