Coeure Says Don't Expect ECB to Solve Problems Outside Mandateby
Executive Board member says ECB's powers reflect its mandate
Calls for political convergence to strengthen monetary union
European Central Bank Executive Board member Benoit Coeure said he’s worried by excessive reliance on the institution’s capacity to solve problems outside its scope.
“Expectations toward the ECB are just too high -- we’re not going to solve the environmental crisis and we are not going to solve the migrant crisis,” he said Friday during a panel with social-democrat representatives from several European countries in Berlin. “The more is expected from the ECB, the more you make the point that something is missing elsewhere.”
Coeure’s remarks echo a refrain from the Frankfurt-based ECB that while it will do everything within its mandate to restore euro-area inflation to its goal, responsibility for the structural reforms to sustain the economic recovery lies with elected politicians. That’s becoming a key issue as record-low interest rates and an unprecedented bond-buying plan struggle to lift the currency bloc out of its malaise.
“In order to reap the full benefits from our monetary-policy measures, other policy areas must contribute decisively,” ECB President Mario Draghi said at a press conference on September 3 after the last monetary-policy meeting. “Given continued high structural unemployment and low potential output growth in the euro area, the ongoing cyclical recovery should be supported by effective structural policies.”
The ECB’s Governing Council will next meet to set monetary policy from Oct. 21-22 in Malta.
At the conference organized by Germany’s Social Democrats, Coeure called for a process of political convergence to foster “resilience” and address the institutional weaknesses of the euro area that were highlighted by the Greek crisis.
“We are worried by this situation, by these very high expectations directed towards us, because we don’t have the instruments to answer all the questions,” Coeure said. “We certainly don’t have the legitimacy to do it, because it’s not part of our mandate.”