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Draghi: Europe faces structural problems; ECB committed to act

FXStreet (Córdoba) - Speaking at the Brookings Institution in Washington, European Central Bank President Mario Draghi, underlined the urgent need to raise potential output in the euro area through reforms. He said Europe faces structural problems, not just cyclical, as potential growth is too low out of high unemployment.

On monetary policy, Draghi noted that the ECB is moving toward a more active and controlled management of the balance sheet, in an attempt to lift inflation. On this line, ECB President reiterated the commitment to launch more measures if needed.

"Let me be clear: we are accountable to the European people for delivering price stability, which today means lifting inflation from its excessively low level. And we will do exactly that. The Governing Council has repeated many times, even as it was adopting new measures: it is unanimous in its commitment to take additional unconventional measures to address the risks of a too prolonged period of low inflation", said Draghi. "This means that we are ready to alter the size and/or the composition of our unconventional interventions, and therefore of our balance sheet, as required".

Draghi also urged governments and European institutions to apply reforms so that fiscal policy can work with rather than against monetary policy in supporting the region’s aggregate demand.

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