Signs of economic growth in Germany and France in the second quarter are positive, but the outlook for the eurozone is still uncertain, European Central Bank Executive Board Member Jose Manuel Gonzalez-Paramo said on Tuesday. "The situation is still very uncertain," and the most recent economic data should be read with caution, Gonzalez-Paramo said in an interview with local news agency Europa Press.
Contrary to expectations, the French and German economies posted a return to growth in the second quarter, with gross domestic product rising 0.3 percent from the first in both countries. European markets have rallied in recent weeks bolstered by the "green shoots" of economic recovery.
ECB economists are drawing up their growth forecasts, due to be published at the beginning of September, and are paying close attention to all the available data, Gonzalez-Paramo said. He said eurozone interest rates, currently at a record low of 1.0 percent, are appropriate, but called for fiscal reform in the eurozone countries in order to exit the crisis.
"It's absolutely vital to define and communicate an ambitious and viable plan for fiscal consolidation which complies with all the guidelines of the Stability Pact," he said. Medium-long term inflation expectations must be kept anchored, he also said.