THE HEAD of Britain’s most powerful business group has urged the Eurozone to stimulate its economy with full quantitative easing, warning that the single currency’s problems could knock the UK recovery off track.
Speaking to City A.M., CBI boss John Cridland said that German fiscal stimulus and French labour market reforms were needed to turn around the euro area’s woes. But he also called on the European Central Bank (ECB) to play its part.
“I would hope we would see [ECB president] Mario Draghi doing some heavy lifting,” Cridland said. “We need full QE. Draghi has been buying asset based securities but he needs to buy government bonds.”
Economic troubles in the Eurozone are “the biggest headwind” facing the UK, Cridland warned. “There’s a slowdown in Germany, Italy is in recession and France is hardly growing.”
His views are not shared by all business groups. James Sproule of the Institute of Directors has said governments should not be “abdicating responsibility for domestic woes to the ECB.”