Eurozone Crisis Hinges on Structural Reforms, Says Draghi and Weidmann

The euro improved modestly on Friday morning following better than expected data that showed the eurozone's service sector and factory output improved in May. However, gains were narrow as both figures, although improved from last month's readings, still indicated a contraction.

Bloomberg reported that a composite index drawn from a survey of purchasing managers rose to 47.7 in May compared to 46.9 in April. Most economists were expecting 47.2, so the data came as a pleasant surprise for the region.

Many are taking this news as a sign that the eurozone could end its longest recession since 1999 in the third quarter of this year. The readings gave the euro a bit of a lift, but since a reading below 50 indicates contraction, gains were limited.

In London, European Central Bank President Mario Draghi appealed to the UK to strengthen its ties with the eurozone rather than pulling away. Draghi claimed that although the bloc stabilizing, member nations must continue to reform and work toward a unified banking system.

British Prime Minister David Cameron has been very vocal in criticizing the eurozone, and promised his constituents that he would renegotiate Britian's role in the EU and hold a referendum on its membership if he wins the next general election in 2015.

Although Draghi did not speak about the bank's next policy moves, he heavily pushed European integration and urged eurozone governments to make the necessary changes to shore up their economies.

Elsewhere in Europe, Bundesbank chief and ECB official Jens Weidmann claimed that there was nothing more the central bank could do to help solve the region's crisis while speaking in Paris. He said the ECB Governing Council has agreed that monetary policy cannot solve the crisis and that the bank has already gone to great lengths to try to mitigate the damage. Now, Weidmann said, it is up to individual governments to make the necessary structural reforms.