ECB chief Draghi urges caution over eurozone recovery

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"Unemployment in the eurozone remains far too high," the president of the European Central Bank has told MEPs.

In his quarterly evidence session with the Economic and Monetary Affairs Committee on 23 September 2013, Mario Draghi warned that any economic recovery was likely to remain slow for the foreseeable future.

He said that recent data showed that growth was continuing, but that much more needed to be done to ensure that the recovery was "fully established".

The committee hearing came less than a month after MEPs voted to approve the first element of a European Banking Union, by giving the ECB supervisory powers of the major banks in the euro area.

Mr Draghi said that completion of a banking union should be a "top priority" for MEPs ahead of next year's European Parliament elections.

Agreement is yet to be reached on the establishment of a eurozone resolution fund, which would allow a single procedure to restructure eurozone banks that get into financial difficulties.

The ECB president also used his evidence session to indicate that the bank was ready to offer euro area banks more long-term loans to keep interest rates from rising to levels that could cause a rise in inflation.

"We are ready to use any instrument, including another LTRO (Long Term Refinancing Option) if needed, to maintain the short-term money market rates at a level which is warranted by our assessment of inflation in the medium-term," he told MEPs.

Mr Draghi - a former governor of the Bank of Italy - has been ECB president since November 2011.

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The European Parliament's disclaimer on the use of simultaneous interpretations can be found here.

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