The European Central Bank works at unconventional measures, stressed the president of the institution. Structural reforms remain crucial
by Emanuele Bonini
The European Central Bank is ready to buy sovereign bond in order to stabilize the Euro zone economy, said the president of the ECB Mario Draghi on Monday. Accommodative monetary policy are the main instrument used by ECB to help the recovery, but «other unconventional measures might entail the purchase of a variety of assets, and one of which is sovereign bonds». Unconventional measures will be undeniable, because «monetary policy alone cannot overcome financial fragmentation in the Euro area», warned Draghi during the Economic dialogue with the European Parliament. «Fragmentation across national borders also reflects underlying national imbalances and institutional deficiencies». Overcoming these imbalances «require determined structural reforms on the side of national governments to improve the business environment and setting incentives to invest, with the aim to boost productivity, create new jobs and raise the growth potential of the economy». As ECB president explained, «risks to the economic outlook continue to be on the downside», and « insufficient progress in structural reforms in Euro area countries constitutes a key downward risk to the economic outlook». It's time to push accelerate the reform process within the framework of what stated in the stability and growth pact, pointed out Mario Draghi. His message is clear and it will be something not welcomed in countries as France or Italy, where flexibility is one of the main political priority in the EU agenda. Mario Draghi's point of view is totally different. «There is an urgent need to agree on concrete short-term commitments for structural reforms in the Member States, on a consequent application of the Stability and Growth Pact, on the aggregate fiscal stance for the Euro area, on a strategy for investment, and to launch work on a long-term vision to further share sovereignty ensuring the sustainable and smooth functioning of Economic and Monetary Union». All that is easy to say, less simple to put in practice. Since the Euro area Member State are divided on the necessity of a strong fiscal consolidation, it appears difficult to have a common and shared strategy to put forward. But it is exactly what the president of the ECB expects from the twenty-eight (twenty-nine from January) governments. Draghi has no doubts that «2015 needs to be the year when all actors in the Euro area, governments and European institutions alike, will deploy a consistent common strategy to bring our economies back on track».
 |
| Mario Draghi |
The European Central Bank is ready to buy sovereign bond in order to stabilize the Euro zone economy, said the president of the ECB Mario Draghi on Monday. Accommodative monetary policy are the main instrument used by ECB to help the recovery, but «other unconventional measures might entail the purchase of a variety of assets, and one of which is sovereign bonds». Unconventional measures will be undeniable, because «monetary policy alone cannot overcome financial fragmentation in the Euro area», warned Draghi during the Economic dialogue with the European Parliament. «Fragmentation across national borders also reflects underlying national imbalances and institutional deficiencies». Overcoming these imbalances «require determined structural reforms on the side of national governments to improve the business environment and setting incentives to invest, with the aim to boost productivity, create new jobs and raise the growth potential of the economy». As ECB president explained, «risks to the economic outlook continue to be on the downside», and « insufficient progress in structural reforms in Euro area countries constitutes a key downward risk to the economic outlook». It's time to push accelerate the reform process within the framework of what stated in the stability and growth pact, pointed out Mario Draghi. His message is clear and it will be something not welcomed in countries as France or Italy, where flexibility is one of the main political priority in the EU agenda. Mario Draghi's point of view is totally different. «There is an urgent need to agree on concrete short-term commitments for structural reforms in the Member States, on a consequent application of the Stability and Growth Pact, on the aggregate fiscal stance for the Euro area, on a strategy for investment, and to launch work on a long-term vision to further share sovereignty ensuring the sustainable and smooth functioning of Economic and Monetary Union». All that is easy to say, less simple to put in practice. Since the Euro area Member State are divided on the necessity of a strong fiscal consolidation, it appears difficult to have a common and shared strategy to put forward. But it is exactly what the president of the ECB expects from the twenty-eight (twenty-nine from January) governments. Draghi has no doubts that «2015 needs to be the year when all actors in the Euro area, governments and European institutions alike, will deploy a consistent common strategy to bring our economies back on track».
No comments:
Post a Comment