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ECB's Lagarde Urge Fiscal, Structural Policies To Help In Boosting EZ Economy

European Central Bank President Christine Lagarde said on Tuesday that fiscal and structural policies must be adopted to support monetary measures in boosting the euro area economy.

"Monetary policy cannot, and should not, be the only game in town," Lagarde said in her introductory statement at a European Parliament plenary session in Brussels.

"Other policy areas - notably fiscal and structural polices - also have to play their part," she said.

Such measures can boost productivity growth and lift growth potential, thereby underpinning the effectiveness of ECB's stimulus measures, Lagarde said.

The ECB has the main refinancing rate at record low and the deposit rate is in negative territory. The bank is also running an asset purchase scheme, in addition to several unconventional measures to support the Eurozone economy.

"The longer our accommodative measures remain in place, the greater the risk that side effects will become more pronounced." Lagarde said.

ECB policymakers are fully aware that the low interest rate environment has a bearing on savings income, asset valuation, risk-taking and house prices, she said.

They are closely monitoring possible negative side effects to ensure the adverse effects do not outweigh the positive impact of ECB measures on credit conditions, job creation and wage income, the ECB chief added.

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