Euro zone faces long, uphill road to recovery, says Draghi

In testimony to European Parliament, Draghi also said the ECB’s new bond-purchase programme for troubled countries such as Spain would provide a backstop to avoid destructive scenarios in the 17-country euro zone.

The ECB agreed the plan last month and financial markets are now looking for any signs Spain might make a formal aid request that would trigger intervention in bond markets.

“Many hope that could be the beginning of the end of the most acute phase of Europe’s debt problems. But even with the programme,” Draghi said the euro zone faced tough times ahead.

“Some things have improved in the last to two or three months, but I think the road ahead is still long and it’s uphill,” Draghi told European Parliament’s Economic and Monetary Affairs Committee.

“The crisis of confidence that has taken over the euro area in the last few months ... has improved but it’s still there.”

He said the euro zone economy is weak and faces the prospect of only gradual recovery, and that the budget austerity being brought in by euro zone governments was likely to continue depressing growth in the near term.

“But what’s the alternative?” he said. “Let’s not forget that the crisis started from increased risk aversion, which addressed several problems, one of which was

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