Mario Draghi said the European Central Bank is ready to add more stimulus and called on governments to do more to help the euro-area economy.
“We stand ready to adjust our policy stance further,” the ECB president said today in the text of a speech at the Federal Reserve Bank of Kansas City’s economics conference in Jackson Hole, Wyoming. “It would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy, and I believe there is scope for this.”
Draghi’s call for politicians to play their part in safeguarding the euro-area recovery comes as pressure mounts on the ECB for radical measures such as quantitative easing. While he has previously pledged to take further action “should it become necessary,” he omitted that qualifying phrase today.
One year after the end of the currency bloc’s longest-ever recession, the economy has stalled, unemployment remains near a record high and inflation is the weakest in almost five years. The ECB’s Governing Council next meets to set monetary policy on Sept. 4 in Frankfurt.
“We need action on both sides of the economy: aggregate demand policies have to be accompanied by national structural policies,” Draghi said. “We should not forget that the stakes for our monetary union are high.”