ECB steps up call for reform

25-May (FT) — The European Central Bank has stepped up its calls for structural reform in the eurozone to support its own ultra-loose monetary policy — but recognised the difficulty of making its case to elected politicians.

The latest account of the deliberations of the ECB’s governing council said that at its April meeting the council “strongly reiterated the need for other policy areas to contribute much more decisively, both at national and European levels, in order to reap the full benefits of the ECB’s monetary policy measures”.

Central bankers across the 19-country currency area have cut interest rates below zero and pledged to buy €80bn-worth of mostly governments bonds a month until next spring to boost the region’s economic recovery.

While the ECB is confident such measures are aiding the economy’s return to health, top monetary policymakers are concerned that growth and inflation will remain weak unless governments carry out root-and-branch reforms of labour and product markets and loosen fiscal policy.

[source]