LONDON (MNI) – European Central Bank Governing Council Member Yves
Mersch told an audience here today that there is a danger of
overburdening monetary policy.
The ECB could only provide short-term financing to the euro zone
and monetary policy could not substitute for the structural reforms
which are urgently needed in the single currency area.
Mersch also suggested that the European Financial and Stability
Fund could become permanent but said that he was not an advocate of an
‘automatic transfer union’.
“There is certainly a danger of overburdening monetary policy, even
within a national framework. To my understanding there is a request for
monetary policy to finance structural adjustments but in my view
monetary policy cannot do that,” he said.
Addressing the question of whether the ECB will engage in further
government bond purchases, Mersch said that the ECB could only make
short-term interventions.
“We can only be active within the area of short-term monetary
policy and short-term financing,” he said.
–London newsroom: 4420 7862 7492; email: email: wwilkes@marketnews.com
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