European Central Bank Governing Council member Ewald Nowotny said the central bank is set to downgrade its economic outlook for 2012 and 2013.
"There will not be an improvement, but rather a deterioration in expectations," Nowotny who also heads the Austrian central bank told reporters late Thursday. The report is due next week.
According to him, the divergence between North and South will increase further. He expects negative growth rates, contraction in all the southern countries in 2012, and stagnation in France.
Uncertainty in Europe is "massively" rising, said Nowotny. It is important that in a sensitive situation like this, every step of monetary and economic policy is taken with great caution, he added.
by RTT Staff Writer
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