Mr Constâncio said a world of permanently lower growth would have “societal implications” because countries would not be able to create enough jobs for citizens and may exacerbate income inequality”
by Szu Ping Chan
The fragile global recovery could be derailed unless governments step up efforts to support growth and strengthen the European banking system, two central bankers have warned.
Vítor Constâncio, vice president of the European Central Bank (ECB), said policy inaction combined with declining productivity and weak demographics could lead to a dangerous spiral of lower growth, higher debt and reduced job prospects.
This could create unrest in countries already blighted by sky-high unemployment, he warned.