The role of European Central Bank (ECB) in dealing with the crisis was coming to its end and now it is the role of EU governments to speed up the reforms, make the eurozone growth possible and “surprise on the upside,” arguued Peter Praet, the top policymaker of the ECB in charge of the bank’s economics portfolio on the ECB’s Executive Board speaking from Lisbon.
Mr Praet also said that the ECB had been playing a significant role in stabilizing the eurozone economy, yet emphasized that “the task of all euro area policymakers is to ensure that the improvement in confidence will be validated by actual outcomes”. Moreover, he stressed that in case the implementation of structural reforms is pursued in an ambitious way, it could be very likely that growth would surprise on the upside in the upcoming years.
Mr Praet commented also on the state of the Portuguese economy saying that it was finally getting stabilized thanks to the country’s banks starting to pass on Frankfurt’s stimulation for households and firms. He added that the ECB’s Outright Monetary Transactions (OMT) bond-buy scheme had proved “an extremely effective” tool in decreasing sovereign bond yields in crisis-hit countries and enhancing funding provisions.
The Federal Constitutional Court of Germany, country’s main court, is currently referring a complaint against the bond-buy scheme to the European Court of Justice due to allegations that the OMT may have violated a ban on the ECB funding governments.
