France and Italy renewed their commitment to reform their economies on Friday in the hope of winning more time to bring their public finances in order but the ECB's president warned more needed to be done to avoid "a relapse into recession".
After the bloc's revival came to a halt in the second quarter, France and Italy want to shift course away from the spending cuts that marked the bloc's response to the 2009-2012 crisis. Germany says debt discipline must continue.
Seated around a large oval table in the EU summit's red marble building, European Central Bank President Mario Draghi told euro zone leaders over lunch that more needed to be done.
"We avoided the collapse of the euro with a joint effort. Now our focus should be to act jointly again to avoid a relapse into a recession," Draghi said, according to his spokesman, who quoted from his speech. "Hope is not a strategy."
He said a coherent strategy for economic growth had to involve "concrete and credible" structural reforms.
Laying out a four-pronged strategy, Draghi emphasized that monetary policy was only one part of an economic revival plan, with the others being reforms, sound public finances and healing the bloc's sick banks.
But despite Draghi's firm words, the summit underscored how the euro zone has few quick fixes for near record unemployment, leaving it in search of billions of euros for spending that Berlin wants to see come from the private sector.
Merkel said no country with a national debt greater than its economic output should be borrowing more, diplomats said.http://www.cnbc.com/id/102098384