ECB seeks govt back-up to support economy
The ECB’s pledge last week to offer more cheap funding to ensure credit keeps flowing to companies and households came with couched criticism that governments aren’t heeding advice from Brussels on how to boost productivity and growth potential.
FRANKFURT: The European Central Bank’s latest round of stimulus is being accompanied by renewed calls on governments to step up their game in nurturing the economy.
It’s an acknowledgment by President Mario Draghi and fellow policy makers that they’ll do what they can - but their options are sorely depleted if the current economic weakness worsens.
That puts the focus on reforms to make economies more resilient, and even fiscal stimulus, despite high debt in a number of countries. It’s a long-running refrain, but Peter Praet, chief economist at the institution, this week put it simply: “Monetary policy remains effective but cannot be the only game in town.’’
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