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Reform plight clouds euro zone outlook

Thursday, April 14, 2016 - 01:38

Consumer prices in the euro zone have offered the ECB a little relief but there's still plenty of reason for the euro zone to worry. David Pollard reports

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It might sound good in principle - in practice this is what reform can look like in France. A new bill on labour flexibility will, say protesters, consign workers to the dustbin. They're not the only ones who should be worried. Caught in a crossfire of this and other recent crises, four out of five people don't want the French president to stand for re-election, say pollsters IFOP - with some understatement. (SOUNDBITE) (French) DEPUTY DIRECTOR GENERAL OF POLLING AGENCY IFOP, FREDERIC DABI, SAYING: "Francois Hollande appears to be in big trouble in terms of public opinion." And this man is increasingly in the firing line. New data confirms the euro zone inflation rate as just picking up. But Mario Draghi's stimulus programme is causing "extraordinary problems" in other ways. At least that's what German finance minister Wolfgang Schaueble thinks - saying pensioners, banks and Europe's integration - are suffering through record low interest rates. His boss also commented. (SOUNDBITE) (German) GERMAN CHANCELLOR ANGELA MERKEL, SAYING: "What politicians in Europe can do is to provide for more growth ... The ECB has a mandate to target inflation. Our task is to generate growth and jobs." But after this week's IMF global downgrades, leading German institutes have also revised down their forecasts. Just 1.6% seen this year for Europe's leading economy. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "The old days of extremely strong growth are very much behind us, and the problem is of course is that if Germany doesn't grow very quickly, it doesn't act as much of a locomotive for the rest of the euro zone, which in continuing to struggle with structural problems of its own." Germany must, say the institutes, spend its budget surplus - a tight fiscal policy "not sustainable" if growth is to rise.

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Reform plight clouds euro zone outlook

Thursday, April 14, 2016 - 01:38