European institutions should address the discrepancies in borrowing costs to businesses and take steps to ease credit constraints to small firms, European Central Bank Executive Board member Benoit Coeure said in an interview published on Thursday.
"European institutions should find ways to address this problem and we are also working" on it, he told Der Standard. "But the ECB can not solve all the problems and is bound by its mandate," he was quoted as saying.
Coeure acknowledged that the debt crisis has lowered the long-term growth potential of Europe. To stimulate long-term growth, the euro area countries must carry out fundamental structural reforms and improve the management of the single-currency bloc, he said.
In a quarterly Bank Lending Survey published yesterday, the ECB said that the banks maintained tight credit standards on loans to both enterprises and households while the demand for loans has also declined.
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