Carney: Lost decade of stagnation looms for Europe

The incoming governor of the Bank of England (BoE) has warned Europe must change tack and introduce significant reforms to avoid a Japanese-style lost decade.

Mark Carney, making his last speech as Bank of Canada governor before he takes up his post at the BoE in July, said European growth is being held back by fiscal austerity. The central banker said austerity will ultimately lead to a decade-long period of stagnation for the continent, and he urged policymakers to change course. "Europe remains in recession, with economic activity constrained by fiscal austerity, low confidence and tight credit conditions. Deep challenges persist in its financial system," he said. "Without sustained and significant reforms, a decade of stagnation thre...