ECB’s Noyer Warns Euro Area Against Giving Up on Deficit Cutting

European Central Bank Governing Council member Christian Noyer warned euro-area governments against giving up on deficit reduction or looking to use a debt build-up to bolster growth.

“No country today has sufficient credibility to put in place a strategy” of financing public infrastructure with a major debt increase, Noyer said today at the Cercle des Economistes conference in Aix-en-Provence, France. “Decades of of deficits have created profound skepticism. The current balance is fragile and any significant deviation from the current budget trajectory would probably be paid for, in a volatile environment, with higher borrowing costs.”