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- Eurozone slowdown doesn't mean recession - ESM's Regling
Eurozone slowdown doesn't mean recession - ESM's Regling
A slowdown in economic growth in the euro zone since last year may be sharper than expected, but that does not necessarily mean a recession is looming, Klaus Regling, head of the euro zone's bailout fund, said. "We are in a phase of slowdown but not of recession," Regling told.
The euro zone's GDP expanded by 0.2% in the second quarter, after a 0.4% expansion in the first three months of the year. It confirms a gloomy outlook for the 19-nation currency bloc.
Regling, who heads the European Stability Mechanism, said the euro zone had strong economic fundamentals and that growth was close to potential.
"We have to remember that not every cyclical slowdown leads to a recession, and not every recession implies another crisis," Regling said.
"It is important to look at the underlying dynamics. This slowdown in growth relates mainly to external factors, while domestic demand remains resilient."
He said the single currency area was better equipped now to deal with any future crises than it was a decade ago, but that more could be done to strengthen its financial architecture.
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