European Central Bank President Mario Draghi said on Friday that budgetary consolidation in the euro zone would entail a short-term economic impact but the currency bloc was on track for a recovery in the second half of 2013.
Draghi told Europe 1 radio that euro zone governments must push ahead with implementing a banking union which should apply to all banks to avoid fragmenting the sector. Governments must pursue structural reforms to reduce labor market rigidity, notably in France and Italy, he added.
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(Reporting By Nicholas Vinocur; Editing by Daniel Flynn)