The head of Germany’s Central Bank says that the debt crisis in eurozone countries is not over, despite a recent calm in financial markets.
German Central Bundesbank Bank president Jens Weidmann on Tuesday warned that even if reform policies were carried out, “the necessary adjustments in the crisis countries are still going to take years."
Weidmann noted that the policymakers in several debt-ridden European countries lacked a clear direction and the ability to make effective policies. He said that France, Italy, and Cyprus had stalled or flawed reform plans.
"The growth rates seen before the crisis, which were partially artificially inflated, will not be achievable for a long time," the Bundesbank chief added.
In January, Weidmann warned of a currency war.
Weidmann is also a member of the European Central Bank’s Governing Council.
Europe plunged into financial crisis in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, and Spain.
The worsening debt crisis has forced the EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.