Economic recovery arrives in 19 countries sharing euro: ECB official

PanARMENIAN.Net - Economic recovery has arrived in the 19 countries that share the euro, but it is up to governments to ensure it endures, European Central Bank executive board member Benoit Coeure said Thursday, April 23, according to AFP.

"The eurozone recovery is clearly there. Growth is coming back, all business and household confidence indicators are pointing upwards. And the good news is that this recovery is rooted in domestic demand and in consumer spending in particular," Coeure told AFP in an interview.

For the time being, however, the recovery is still "insufficient and somewhat unequally spread from country to country," he cautioned. "Our concern is that the current upturn is merely a cyclical one, that it's merely a flash in the pan."

To help get the economy back on its feet, the ECB launched a massive one-trillion-euro bond purchase program, known as quantitative easing or QE, at the beginning of March, under which it aims to buy 60 billion euros ($64 billion) of bonds per month until September 2016, or more than 1.0 trillion euros in total.

Coupled with the weaker euro and falling energy prices, the ECB scheme "is injecting a lot of fuel" into the economy, Coeure said. But these factors "are only transitory," he added, urging governments to turn up the pace of economic reform.

"It's extremely important to 'convert the try', so that growth can become long term," the central banker said, using a term from the game of rugby.

"This can be achieved via labor market reforms and by more generally creating a business environment that is more conducive to investment," he argued. "The real test will be a pick-up in investment in Europe this year," he added.

To achieve this, "favorable financing conditions are needed. That's what we're doing, that's the role of the ECB. But people must also have plans and the desire to do business. That's the task of the governments."

Coeure insisted there was no question of the ECB rolling back its QE program for the time being. "That's a discussion we might have later down the line," he conceded.

At this stage, however, "we haven't encountered any technical problem in the implementation of the program. It's going very smoothly in all eurozone countries and market reaction has been exactly as we hoped," he said.

QE "will have an accelerating effect on recovery, we're certain," Coeure said, adding that fears of a scarcity of bonds for the ECB to buy had proven unfounded.

"We don't see any difficulty in buying all of the assets that we had planned to buy as part of this program," he insisted.