The president of the European Central Bank (ECB), Mario Draghi, has stressed the “urgent” need for reforms in the euro area to increase production in the region since, warns, “without reforms, there can be no recovery.”
“recently said that in the current situation, in monetary policy the risk of doing too little exceeds the risk of doing too . If we want a stronger and more inclusive recovery, same applies to too little reform, “stressed the President of the ECB.
In a speech given at Brookings Institution, Draghi refused to be postponed reforms to the “good times” to avoid affecting the recovery, as they almost always have been postponed until the situation improves have finally come to be taken.
In addition, stressed is not sure that without reforms now have good times in the future , since the problems facing Europe are structural part. Therefore, reforms seen necessary because the current growth potential is too low to cope with high unemployment and debt reduction.
Also, Draghi argues that in several countries start to see the fruits of “successful efforts” that have taken place over the last years in Europe, “in bad times.”
“In short, I see no way out of this crisis unless we generate more confidence future potential of our economies, “added the president of the European Central Bank.
As regards fiscal policy, warned that it would be” counterproductive “to question the letter and spirit of the European tax market because it would generate doubts about the sustainability of countries and raise its cost of borrowing.
however, urged countries with fiscal space to use it, because it can support monetary policy to encourage demand, while those who have to continue the consolidation can support it by altering their budgets, “in particular simultaneously cutting non-productive expenditures and distortionary taxes.”
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