Trichet urges economic reforms to counter ageing slowdown

The ECB has urged eurozone governments for years to undertake deep reforms of their economies, notably by relaxing job protection, to increase non-inflationary growth and to help them to reduce government overspending.###

Trichet said: "Forward-looking growth-accounting exercises show that these adverse demographic developments would reduce average real GDP growth in the period up to 2010 below 2.0 percent."

And growth of gross domestic product could slow further to about 1.5 percent in the period up to 2020 if so-called supply-side measures did not compensate for the ageing trend, he said.

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Trichet said that Europe's labour market had shown a much weaker performance than that of the US and that the gap between European and US output per capita had therefore been widening.