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27 Nov 2014
Draghi: Lack of structural reforms raises the “specter of permanent economic divergence”
FXStreet (London) - Following on from comments at the Finnish parliament, European Central Bank president Mario Draghi is speaking at University of Helsinki, at an event organised by the Bank of Finland.
Speaking on fiscal union alongside current monetary union, the ECB president said that: “A single monetary policy focused on achieving euro-area price stability cannot react to shocks that affect only one country or one region. And we do not have a federal budget that can respond instead, as in the US, for example.”
Draghi said that the lack of structural reforms raises the “specter of permanent economic divergence” between members of the monetary union,” adding that “insofar as this threatens the essential cohesion of the [European] union, this has potential damaging consequences for all EMU members.”
The comments from the ECB president come ahead of the ECB’s monetary policy decision on 4 December.
Speaking on fiscal union alongside current monetary union, the ECB president said that: “A single monetary policy focused on achieving euro-area price stability cannot react to shocks that affect only one country or one region. And we do not have a federal budget that can respond instead, as in the US, for example.”
Draghi said that the lack of structural reforms raises the “specter of permanent economic divergence” between members of the monetary union,” adding that “insofar as this threatens the essential cohesion of the [European] union, this has potential damaging consequences for all EMU members.”
The comments from the ECB president come ahead of the ECB’s monetary policy decision on 4 December.