Eurozone confidence returning, says Mario Draghi



Confidence (BSE: ZCONFIDE.BO - news) in the future of the eurozone is returning, Mario Draghi, the head of the European Central Bank, has claimed.

"I address you today against the background of a relative return of confidence in the prospects for the euro area," he told a banking conference. "The return of confidence is justified."

Mr Draghi was speaking in Frankfurt as economists digested better-than-expected data for the region. A poll showed business sentiment in Germany improved in November (Xetra: A0Z24E - news) , even as official data confirmed the German economy lost pace in the third quarter amid the eurozone debt crisis.

Germany's closely-watched Ifo index rebounded from a two-and-a-half-year low to post its first gain in eight months with a rise to 101.4 from 100.

The reading stoked hopes that Germany would suffer a "dip" rather than a recession, after growth slowed to 0.2pc in the third quarter of the year, from 0.3pc in the previous three months.

Business confidence in France also improved in November, with an official index tracking sentiment climbing by 3 points from October to 85, albeit still below the average reading of 100.

Mr Draghi said the European Central Bank's new emergency bond-buying programme to help stricken nations bear their debts, known as Outright Monetary Transactions (OMT (CDNX: OMT.V - news) ), had helped to stabilise conditions. "Given that the return of confidence was related in part to the announcement of the OMT, I would like to assure financial markets that we stand ready to implement this programme as and when required," he said.

However, he also urged European governments to pursue structural reforms to strengthen their economies, and work on closer economic and financial integration. "That is what will fully restore stability to our continent," he added.

German bank Commerzbank (Other OTC: CRZBF.PK - news) 's chief executive Martin Blessing struck a more ominous note at the conference, warning that without a bold political move the eurozone will fracture. "There are only two options: more integration or break-up, and time is running out," he said.