Asian investors more optimistic on euro's prospects: EU bailout chief
October 11, 2012, 12:11 am TWN
BERLIN--Potential Asian investors in Europe's bailout shield are more bullish on the eurozone than they were six months ago, the fund's chief said on Wednesday, striking an optimistic tone on the crisis.
“I was in Asia three weeks ago and many investors told me they were less pessimistic than they were half a year ago,” Klaus Regling told Germany's Die Zeit weekly in its edition to appear on Thursday.
“The realization is gradually getting through that a lot has happened on the national level and that we have new instruments on the European level,” said Regling, head of the newly instituted 500-billion-euro (US$643 billion) ESM fund.
In what was hailed as “a historic milestone,” the fund, designed to help struggling eurozone states, finally came into being on Monday after a lengthy process, held up by legal challenges in Germany.
“If you look at budgetary consolidation or regaining competitiveness, at least half the path has been achieved. If the reform course is continued, this part of the adjustment will be completed within two years,” he added.
He said he did not expect an immediate request for aid on the part of Spain, pointing to sharply declining borrowing costs despite a crippling crisis in the eurozone's fourth largest economy.
“That depends on the government in Madrid and market developments. The rates on the capital markets for Spain have dropped, therefore the country is not in a position where it is being forced to receive aid,” said Regling.
He also offered hope for Greece, where the crisis began nearly three years ago.
If more structural reforms were to be carried out in the Greek economy “there could be a real growth drive,” he said.
“I am not one of those that says a new debt write-down is urgently necessary,” added Regling.