ECB Urges Governments to Step Up Structural Reforms

European Central Bank officials, preparing to consider fresh stimulus for the euro area, warned governments to get moving with structural reforms and told investors to be realistic about any action monetary-policy makers might take.
Speaking at a conference in Budapest, Executive Board member Benoit Coeure reiterated that the ECB will “review and possibly reconsider” its policy stance at its March 10 meeting, while stressing that without economic reforms the region’s recovery won’t last. Governing Council member Ewald Nowotny said he hoped markets would be “more rational” than they were in December, when central-bank measures fell short of expectations and sent the euro and bond yields soaring.

Despite an unprecedented level of monetary stimulus, the ECB is struggling to revive inflation as oil prices slump and China’s slowdown drags on global trade. Factories in the euro area slashed prices of goods by the most in a year in January, a purchasing managers’ survey by Markit Economics showed on Monday, underscoring the risk that weak consumer-price pressures are becoming ingrained.

“We have always made it clear that we are ready and able to play our part,” Coeure said. “But for the recovery to become structural, and thus to increase growth potential and reduce structural unemployment, monetary policy does not suffice.”

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza