"I see the big challenge for this year in the
still very tentative upturn," Mersch said in the text of a
speech to be given at an Ifo Institute event in Munich. "The
economic recovery in Europe still stands on wobbly legs."
Mersch also urged those countries which can afford it to invest
While he did not specifically name Germany, it has faced
criticism from countries in Europe and beyond for spending less
on infrastructure over the past decade.
Government spending on this fell to 1.5 percent of gross
domestic product (GDP) from 2 percent in 1999, and is well below
the European Union average of 2.5 percent, according to the DIW
Turning to small- and medium-sized businesses (SMEs), Mersch
said that some of them suffer from bottlenecks in financing. He
proposed founding a database which would assess SME credit risk.
Mersch repeated his call for increased use of asset-backed
securities (ABS) as an SME financing tool.
"Robust European securitisation platforms could be a sensible
addition to bank-based financing," he said.
(Reporting by Sakari Suoninen)
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