In a Financial Times poll of eurozone economists conducted in mid-December, a majority of respondents also viewed the EU’s tough budget rules as not fit for purpose.
Mr Draghi has repeatedly urged politicians to support the central bank’s actions by loosening fiscal policy and reforming the structure of their economies. His calls have been echoed in part by other senior monetary policy makers, including Jens Weidmann, Bundesbank president, who has argued that countries must implement tough supply-side reforms to boost the region’s growth potential.
A majority of 29 out of 32 respondents supported the central bankers’ plea for greater government action.
“Europe needs strong political leadership and a firm policy hand,” said Lena Komileva of G+Economics, a consultancy.
“Mario Draghi is right to underline the role of national governments,” said Tom Rogers, economist at Oxford Economics, a research firm. “More ambitious reform could unlock investment over the coming years, as well as boosting underlying potential . . . providing some room for an easier fiscal stance.”
But while the ECB president has defended the fiscal compact, a set of budgetary rules that imposes strict limits on member states’ deficits, economists were more critical. Twenty out of 28 respondents said the compact, which was passed at the height of the crisis, was ill-equipped to spur the region towards recovery.
“The success of the euro project demands a degree, perhaps a high degree, of fiscal union. And so the motivations behind the fiscal compact are laudable,” said James Ashley, of RBC Capital Markets, a bank. “But the detailed modalities of how it has been designed and implemented leave a lot to be desired.”
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