POLITICIANS must reform their economies if they want to regain competitiveness and get back to growth, European Central Bank (ECB) boss Mario Draghi told French MPs yesterday.
Draghi argued that he has done his best to reassure markets the Eurozone will not collapse and to restore funding conditions, but that politicians must use this support to boost future growth.
“Monetary policy cannot create real economic growth,” he said.
“If growth is stalling because the economy is not producing enough or because firms have lost competitiveness, this is beyond the power of the central bank to fix.”
Meanwhile fellow ECB board member Joerg Asmussen said that if banks need recapitalising before the new resolution regime and the banking union are in place, governments may have to pay up.
“If banks cannot raise new capital themselves, the fiscal backstops which can be tapped if needed will be national budgets,” he warned.