Job creation will remain a major problem for euro zone countries as the region’s economy faces a bumpy road to recovery with governments trying to redress their budgets and banks consolidating their balance sheets.
That’s the view of European Central Bank President Jean-Claude Trichet, who told euronews that there is only the prospect of modest growth ahead. Trichet said: “Despite the fact that we will have positive growth and we are out of this dramatic period of strong decrease of activity, we nevertheless are not very likely to have sufficient growth to permit to diminish unemployment.” Trichet also issued a warning to the banks on dividends and bonuses saying they should put aside their profits and not embark on large dividends. He said they need to have balance sheets that are as solid and resilient as possible: “All that has been done by governments in terms of exceptional measures, that has been a risk put (taken) to help the financial sector. All this was not done to please the banks, “pour leur beaux yeux”, as I would say in French. All this has been done to help them to do their job, which is financing the real economy. So our message for the commercial banks is very clear – do your job.” Trichet said even though the real economy is now growing again and there is some kind of stabilisation it is too early to declare victory.