Brussels, 02/02/2015 (Agence Europe) - On Monday 2 February, Benoit Coeuré, a member of the Governing Council of the ECB, called for shared sovereignty regarding structural reforms in the eurozone.
“Constantly refining fiscal rules while leaving structural policies at the national level makes little sense. If fiscal policies are to be free from structural dominance, a strong framework for both is needed (…). Tomorrow, sovereignty over structural reforms should be shared between countries (of the eurozone), allowing for symmetric risksharing”, Coeuré told a conference in Budapest hosted by the Hungarian Central Bank.
He referred to the recent progress made in terms of banking supervision and resolution, responsibilities which have now been transferred to the European level in the framework of banking union.
According to Coeuré, the ECB's decision to launch a programme for the buy-back of public and private securities from March of this year (European-style 'quantitative easing' or 'QE') has opened up “a unique window of opportunity for euro area governments to act together, remove structural obstacles to growth and pull our economy out of the low-growth, low-confidence trap” (see EUROPE 11236). 'QE' is an “open” programme which will be reassessed as the indicative cut-off date laid down - September 2016 - approaches and, if the objective of sustainable convergence and medium-term inflation of around 2% has not been achieved, “we will do more”, he said.
At the same conference, the Austrian central banker, Ewald Nowotny, predicted that the euro area would come under “deflationary pressure” in the first half of 2015, but he rejected the hypothesis of generalised deflation. (MB)