23 Mar 2012

Worst of European debt crisis over: ECB

1:48 pm on 23 March 2012

The head of the European Central Bank says the worst of the debt crisis affecting the euro zone is over.

Mario Draghi says key indicators, such as inflation and budget deficits, are now all better than in the United States.

"Investor confidence is returning and for weeks now the ECB has not needed to take supportive action by buying bonds. The ball is now in the governments' court. They have to make the eurozone permanently immune to crisis," he said.

Mr Draghi, who took over the running of the ECB last November, defended the recent move to pump more than $NZ1 trillion into Europe's banking system, which some critics warn could fuel inflation in the Euro Zone.

"Of course there are risks and side effects if you use such a powerful medication as the one trillion euros were, but the situation last year was critical," he said.