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No relief in crisis until next year, says banking chief

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No relief in crisis until next year, says banking chief

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There is light at the end of the financial tunnel. That’s the view of Mario Draghi. But the European Central Bank President warned there will be no immediate recovery.

The three-year-old crisis was likely to stretch deep into 2013 aided by large scale imbalances between eurozone members.

“It is inevitable that a union of sovereign states can become fragile, to say the least. If some states are permanent creditors and others are debtors,” the ECB chief told a meeting of top financial officials in Paris where he was joined by Christine Lagarde. The Head of the International Monetary Fund outlined what measures she wants implemented.

“The banking union seems to us to be the first priority, more and better budgetary integration seems to us to be the second priority and then, in the background, the fight against macroeconomic imbalances in the eurozone,” she said.

Banking union should apply to all banks added Mario Draghi to avoid fragmenting the sector and it should happen quickly.