By Gilles Castonguay
VENICE--The European Union has overcome a severe crisis that proved to be more complicated than the one in 1929, but the region has to do more to revive its weak economy, Italy's economy minister said Saturday.
"The crisis is more complex than what we had in 1929," said Fabrizio Saccomanni in a speech at an event, although he recognized unemployment and other problems were far more serious during the Great Depression.
Mr. Saccomanni said EU leaders committed a number of policy mistakes after the crisis swept across the region in 2008, but a number of institutions, including the European Central Bank, made a lot of progress in trying to resolve the problems.
"The idea that nothing has been done and nothing will be done is clearly wrong," he said, referring to the work towards an EU banking union and supervision mechanism.
"What has been done by the ECB is very important," he said. "This is...an institution that has accomplished (a number of) measures of liquidity management and monetary policy in a way that will reduce the risk of disruptions should economic--and on the inflation front--conditions change and require a change in policy direction."
Although the ECB has flooded the euro-zone banking system with longer-term liquidity, its outright purchase of debt securities has been far more modest than the U.S. Federal Reserve's program.
"What the ECB has done is much easier to unwind than what has been done in other countries, where the central banks have purchased a lot of assets," he said.
This past week, the ECB refrained from taking new steps to boost the euro zone's weak economic prospects, but it urged governments to revamp their economies and shrink debt burdens.
Business surveys show euro-zone gross domestic product will contract for a seventh straight quarter between April and June.
ECB staff economists have cut their 2013 GDP forecast, seeing a 0.6% drop. Officials expect GDP to grow 1.1% next year, an increase from past estimates.
Write to Gilles Castonguay at [email protected]