European Central Bank (ECB)
chief Mario Draghi quoted late Italian statesman Carlo Azeglio
Ciampi in his report on eurozone recovery to the European
Parliament on Monday.
"Now more than ever, Europe needs to respond in a cohesive,
decisive manner to the challenges it faces," Draghi said. "If we
act alone, we are at the mercy of events that are greater than
us and which threaten European peace and security," he added,
quoting Ciampi.
The challenges have increased since February this year,
Draghi said.
The eurozone is in "moderate but stable" recovery thanks
largely to ECB monetary stimulus policies, but lawmakers must
speed up reform to remove the obstacles still hampering the
economy, Draghi said.
The eurozone economy "has shown remarkable resistance to
negative developments and the uncertainties deriving from the
global environment," he said.
"Unemployment is decreasing steadily (and) nominal inflation
has gradually recovered since the beginning of the year, from
-0.2% in February to +0.5% in October".
He credited the ECB's monetary stimulus measures - including
its massive bond-buying or quantitative easing (QE) programme
and its Targeted Longer-Term Refinancing Operations (TLTROs) in
which the more banks lend the lower the refinancing rate will be
- with sparking growth.
"Our monetary policies as of June 2014 have been a key
factor" behind the eurozone recovery, Draghi told the EP.
"The transmission of our monetary stimulus to banks' lending
conditions has been significant," he said.
However, EU lawmakers must find ways to remedy "structural
challenges" still hampering full-fledged eurozone recovery.
"The right policies must be conceived...to ensure more
elevated, sustainable eurozone growth," he said. "Fiscal
policies must support economic recovery while respecting EU
rules - more growth-friendly tax policies could drive growth".
While a "competitive financial sector" is key, the eurozone
also needs "more decisive action to increase the potential
growth rate", said Draghi.
Structural reforms must "accelerate substantially",
especially those that increase productivity and make for a
better business climate, the European central banker said.
"We must make the best possible use of the yearly economic
governance cycle and ensure that recommendations, including
those for the eurozone, are...implemented effectively," he said.
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