Austerity vital but states should also reform for growth, says ECB member

Austerity measures in the eurozone are unavoidable, but countries can and should counteract with reforms to boost growth, European Central Bank Governing Council member Luc Coene said on Saturday.

In a panel debate on the eurozone in Brussels, Mr Coene was challenged by economist Paul De Grauwe, of the London School of Economics, who said that policymakers should be foremost in promoting growth not reining it in.

“To think that austerity could be avoided is naive... The interest rates would have risen even more than they did,” said Mr Coene, who is also governor of Belgium’s central bank.