The European Central Bank stands “ready to use additional unconventional instruments” in its struggle against deflation and weak GDP growth in the eurozone, said the president of the Bank, Mario Draghi, on Monday.
Speaking at the EU Economic and Monetary Affairs Committee, Draghi said that the European Central Bank was fully determined to ward off growing worries of a potential period of deflation in Europe by continuing to pump vast amount of money into the economy by buying government bonds.
Then European Central Bank has long avoided such stimulus measures but in June, it implemented a series of interest-rate cuts and announced cheap loans for banks. Early September, it announced new interest-rate cuts.
But, Mario Draghi also stressed the importance of structural reform to complement the stimulus-inducing steps of the European Central Bank.
“Let me add however that the success of our measures critically depends on a number of factors outside of the realm of monetary policy. Courageous structural reforms and improvements in the competitiveness of the corporate sector are key to improving business environment,” Draghi said.