ECB chief warns euro zone crisis far from over

The head of the European Central Bank (ECB) has warned that the euro zone crisis was far from over as unemployment in the currency bloc hit a new high in October. Mario Draghi said the EU had not yet emerged from the crisis, predicting that the recovery for most of the euro zone would not get under way until the second half of 2013.

Urging governments to tighten budgets and implement a banking union, he asked them to leave behind a "fairy world" that caused the financial meltdown three years ago.

He said the crisis had shown that the EU was living in a fairy world amid unsustainable debts, weak banks and poor policy co-ordination of the past.

Christine Lagarde, head of the IMF, speaking at a conference in Paris, also said banking union seemed to be the first priority.

The euro gained against the dollar following the approval of the latest 36 billion euro bailout for Greece by a large majority even as unease about the cost to taxpayers mounted.

The vote would go to strengthen chancellor Angela Merkel, less than a year ahead of federal elections. Meanwhile, despite the plan's criticism, only 12 members of her conservative-led coalition rejected the package – less than party officials had feared.