In order to stimulate Eurozone economic growth that has diminished during the crisis, structural reforms should be initiated, Yves Mersch, a member of the executive board of the European Central Bank said Saturday.
"Indeed, most estimates find that potential growth in the euro area has diminished during the crisis," he said at meeting in Luxembourg. "This is why moving ahead with structural reform is essential."
According to him, the best way to raise real growth in the euro area is to open up product and services markets and to reallocate resources to the most productive industries.
If the current fiscal rules are to be credible, the currency bloc needs higher growth, and that means looking deeply at how authorities coordinate structural policies across Europe.
"On our current reform-resistant course, I see a distant but distinct probability that growth in the euro area begins a secular downward drift," Mersch said.
He observed that implementing structural reforms is a national responsibility, but authorities at the European level have not done enough to help gather momentum.
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