ECB’s Constancio Says Euro-Area Recovery Needs Higher Investment

ECB Vice President Vitor Constancio says at event in Sitges, Spain, that “the economic recovery in the euro area is now broader and it is firming itself but still in need of achieving higher investment to make it more self-sustained.”

  • “ECB policies are working and making a significant contribution to the normalization of economic conditions in the short term. Let me add that they also help the medium-term”
  • Total factor productivity growth “needs to resume growing at least at an annual growth pace around 1%, the rate prevailing at the beginning of the previous decade”
  • “This will not be achieved without a continued effort to implement structural reforms for which monetary policy is not responsible”
  • Long period of low rates may lead to “possible rich asset valuations” but “to date, no generalised overvaluations in asset markets have been identified”
  • NOTE: ECB Warns of Contagion Risk If Greece Deal Not Reached Fast

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