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European bailout fund’s head rules out another 2009 crisis

European bailout fund’s head rules out another 2009 crisis

Mubasher: The Eurozone has worked hard to ensure that the region is well-prepared to deal with any incoming financial shocks, the European rescue fund’s managing director told CNBC, while downplaying the potential of another recession in the future.

“We are not heading into a crisis like 10 years ago,” European Stability Mechanism’s (ESM) head Klaus Regling told the news outlet.

“Sometimes reading the media it sounds like we are heading back to what happened 10 years ago — it’s not the case [and] we don’t even have stagnation,” Regling said.

However, the ESM’s head warned against risks of “a crisis from time to time” in the economic system.

“We must do everything to try to prevent it, but it happens [and] it always comes from a different corner.”

Worries mounted over flagging growth in the Eurozone, prompting the European Central Bank (ECB) to resume its massive bond-buying programme.

The German government on Thursday reduced its growth forecast for next year to 1% from 1.5%, citing global trade rows and new auto regulations, all of which weighed on Europe’s biggest economy and the wider region.

Regling dismissed claims that the Eurozone carried out sufficient reforms to weather future shocks, saying that “efforts have been strong.”