MADRID: Euro zone policymakers need to use all available tools to support the bloc's economy, European Central Bank Executive Board member Benoit Coeure said in a Spanish newspaper interview published on Wednesday.
"The euro area faces risks to its economic growth on such a scale that it's necessary to use all available tools to support the economy," Coeure told daily Cinco Dias.
"And that means using the instruments on the demand side and the supply side." Last Thursday, the ECB cut interest rates to a record low and launched a new scheme to push money into the flagging euro zone economy, surprising markets and leaving open the option of more to come.
Coeure also pointed to the possibility of using fiscal policy to support the economy "in those countries that have space to expand it." "But what matters most are the structural reforms," he added. In September and December, the ECB will offer banks four-year loans to encourage them to lend to companies and others - a ploy that is likely to generate hundreds of billions of euros of fresh credit.
However, the bank has held off outright sovereign debt acquisitions - known as quantitative easing (QE) - unlike the US Federal Reserve and the Bank of England.
"We want there to be enough liquidity and that the bank's balance returns to previous levels, and to do so in a way that is useful for the economy. Because of this, it is not quantitative easing but is conditioned and aimed at helping credit flow," he said. "In a way, it could be described as qualitative, and not quantitative, easing."
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