Draghi: euro zone set for second-half 2013 recovery

European Central Bank President Mario Draghi said that budgetary consolidation in the euro zone would entail a short-term economic impact but the currency bloc was on track for a recovery in the second half of 2013.

"We have not yet emerged from the crisis," Draghi told Europe 1 radio. "The recovery for most of the euro zone will certainly begin in the second half of 2013."

"It's true that budgetary consolidation entails a short-term contraction of economic activity, but this budgetary consolidation is inevitable," Draghi said, speaking through a translator.

Draghi, in Paris for a conference with top financial officials, said euro zone governments should push ahead quickly with implementing a banking union which must apply to all banks to avoid fragmenting the sector.

Draghi said that while the downgrades did not have an immediate impact on borrowing costs, they were a signal to governments which must be taken seriously.