Berlin (awp / sda / reu) – After the announced flood of money the Fed ECB President Mario Draghi called on the euro-States to common reforms. The members of the currency area should be a “real economic union” take decisions and implement on uniform institutions, he wrote in the “Business Week”.
The ECB announced bond purchases in the amount of good 1.1 trillion euro on Thursday , Draghi seeks to prevent the euro zone slipping into a fall in prices across the board (deflation), which would hurt the economy.
The base rate of the ECB is already near the zero line. Opponents of the proposed flood of money fear that these paralyzes the reforming zeal, especially in the southern European countries, but also in France, because the government can borrow money at low interest rates.
Draghi took the criticism and appealed to the policy. Economic reforms so far are largely a matter of individual states. In future, the euro-countries should be able to oblige governments to reform in an economic union.
POSSIBILITIES OF THE ECB LIMITED
Thus, the mere economic union demonstrate that these countries actually overcome by growing their debt could. The possibilities aimed at price stability ECB were limited, Draghi said. With its monetary policy, they could not cope with shocks, which concern only one country or region.
As an example for closer cooperation Draghi called the planned EU capital market Union. A compilation of the financial markets is a condition that the private sector will more involved in financial risks.
EU Financial Market Commissioner Jonathan Hill wants to publish in February a proposal. The European Commission wants to create a cross-border European capital market in the next five years.