European leaders signalled rising confidence that their region's crisis is near an end, while Federal Reserve Chairman, Ben S Bernanke, warned that a US recovery isn't assured.
The euro area’s woes are “almost over” after a slow initial response by policy-makers, Italian Prime Minister, Mario Monti, said in Tokyo today. German Chancellor Angela Merkel said yesterday that the crisis is ebbing and her country’s borrowing costs will probably rise as its status as a haven wanes.
Italian Prime Minister Mario Monti said he does not expect the "flames of crisis" to return as eurozone nations implement closer fiscal cooperation and seek to boost the region's bailout funds. Bernanke, who cited “green shoots” of recovery in the US in March 2009 only to see his nation’s jobless rate climb to 10 per cent seven months later, said in remarks published yesterday “it’s far too early to declare victory”.
Bernanke’s comments contrasted with a series of declarations by Monti during a visit to Japan, with the Italian leader saying a solution to Greece’s challenges is almost accomplished, Spain is employing discipline and Italian actions have helped stop deterioration in Europe’s woes.
German Finance Minister, Wolfgang Schäuble, said yesterday that he sees no scenario under which the current euro area rescue fund, the European Financial Stability Facility, will have to issue new bailouts in the next three months.
“The world economy is recovering and though there obviously are risks, on balance we’re through the worst in Europe”, said Tim Condon, chief Asia economist at ING Financial Markets in Singapore. Bernanke may be more cautious because “the Fed has a dual mandate of inflation and unemployment and while they’re doing OK on the inflation metric, they’re failing dismally on the other”, he said.
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