Draghi urges reforms to encourage bleak prospects … – Ambito.com

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    Friday May 22, 2015
    
         
    

In EU countries

President of the European Central Bank urged countries in the area euro to reform their economies, warning that future growth will be modest facing the entrenched unemployment and low investment.

Although not the first time that Mario Draghi makes such a request, his argument in favor of the reforms highlighted concerns that governments may be missing ECB quantitative easing.

“It should be clear that (…) the argument that the accommodative monetary policy is an excuse for governments and parliaments postpone their reform efforts is incorrect “, Draghi said at a meeting of senior officials from central banks around the world.

His comments come at a time when the QE program of the ECB of a billion euros, strengthens loans and injects extra money in the currency bloc. This, in turn, relieves pressure on governments to reform.

In making his argument, Draghi countries warned that Europe’s problems are far from over despite a panorama economic which is “currently brighter than it has been for seven long years.”

This improvement, he said, is hampered by the large debts that exist in some parts of the euro area and an entrenched unemployment “chasing too many countries”.

“A cyclical recovery alone will not solve all the problems of Europe”, said Draghi to the audience of central bankers and academics in an event organized by the ECB in Portugal.

Members of the Eurozone are discussing with Greece how the country adheres to a program of reforms by leftist government is choking the local economy. But Athens is not alone in resisting a painful reforms.

The European Ministers of Finance recently said that only a quarter of the recommended block reforms by the European Commission, the executive arm EU, have been carried out and, now that the crisis is easing, the pace of reform is slowing more.

If you do not act, Draghi said, the already modest economic prospects worsen the currency bloc.

“While it is expected that some of the effects of the crisis on investment and employment to relax, it is projected that potential growth will remain well below past rates of growth the crisis, “he said.