July 1, 2020 / 8:42 AM / 5 days ago

Euro zone's recovery fraught with risks, ECB's Panetta says

FILE PHOTO: Senior Deputy Governor of the Bank of Italy, Fabio Panetta is seen in his office ahead of his appointment to the European Central Bank's executive committee, in Rome, Italy September 26, 2019. REUTERS/Remo Casilli

FRANKFURT (Reuters) - The euro zone economy has weathered its pandemic-induced crisis as well as possible but the long term recovery remains under threat, European Central Bank board member Fabio Panetta said on Wednesday.

A drop in global growth will continue to weigh on Europe, uncertainty is likely to hold back investment and consumption, and a tepid recovery could set off difficult-to-reverse recessionary forces, Panetta said.

“The euro area has so far weathered the consequences of the shock about as well as could be expected,” Panetta said in a speech. “Positive indications need to be taken with a pinch of salt, since the high levels of prevailing uncertainty make it difficult to rely on past regularities.”

Reporting by Balazs Koranyi; Editing by Gareth Jones

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