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German industrial production rose for a second straight month in March economists were expecting a contraction but still with -- -- -- in a recession and an unemployment rate at a record high.
What is the growth outlook for the region -- joining us now is John Lipsky former first deputy managing director.
But the IMF now at Johns Hopkins said John thank you for joining us.
We haven't told us much about Europe these days but that doesn't mean that the problems they have have gone away doesn't.
No not at all -- -- remain challenged they need to make significant policy adjustments in many countries embedded.
Some structural changes in how the Euro -- in the -- Europeans.
Union economy work.
It's always been this battle between the Germans.
And what's gonna say the French but maybe not on the mr.
That they -- the battle between austerity.
And you know getting the economy growing they just don't seem to go together very well.
And it's a real problem how do you kind of walk of that line.
Well with all due respect I don't think the issue of austerity verses growth as they a very productive way to view this.
There's no doubt that most of the economies of the Euro -- Need to adjust their fiscal accounts over the medium term to the realistic process of prospects of their economies.
Just like here in the United States the question is.
What's the appropriate pace of that adjustment.
The the economy's think the governments have agreed in essence to allow what economists call automatic stabilizers to two.
Work rather than hold to fix targets.
If the economy's underperformed their being allowed to run somewhat bigger deficits in the short run another -- slow down the process of adjustment.
But the real problem of the eurozone economy has been the loss of competitiveness.
Of the peripheral economies relative to Germany in the core countries.
That has to be were addressed through an improvement in competitiveness and efficiency of the peripheral countries and allowing demand to rise in Germany.
That is occurring that have started her but it requires.
-- breaking down monopolies of of opening the economies of liberalizing.
To achieve and -- -- To improve the workings of labor markets in the European economy.
And improving the banking system those are big targets.
Big jobs -- are gonna take a bit of time.
Had I suddenly I you -- banking the reports that the ECB may be the European Central Bank may be looking into buying bad loans and southern European banks is that.
One solution that you would I think his viable.
Well there's no question that the European banking system and -- -- it's important to remember.
That the European economy in the Euro -- economy is much more dependent upon bank credit that is the case here in the United States.
So it's absolutely crucial that the banking system.
Be stabilized we strongly capitalized be efficient.
And be able to supply credit growth to support the growth of that economy.
Now the European Central Bank has taken some extraordinary actions dislike the Fed here.
But there -- more is needed and that you may know and viewers may know.
There have been some very important decisions on creating what they call -- banking union in Europe a single Europe eurozone wide supervisor.
-- and eventually did deposit insurance scheme resolution scheme again these are big jobs it will take time -- the interim.
It's important that the Central -- support the banks.
Sorority at a time -- so -- so much to talk about we could talk for hours.
Thank you so much John Lipsky would Johns Hopkins University hope we can talk again -- thank you some.
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