HERRENBERG, Germany (Reuters) – Europe’s economic recovery and that of its most important economy, Germany, has lost pace, a European Central Bank policy-maker has said.
Speaking to an audience near Stuttgart in Germany, Executive Board member Yves Mersch voiced concerns about the “critical” state of the eurozone’s sluggish economy and put the responsibility on countries rather than the European Central Bank to act.
“The economic situation is critical, the growth is weak and inflation is unusually low,” Mersch said. “The economy has lost momentum.”
“The moderate pick-up is very slow in historical terms,” he said. “After other crises it was much quicker and steeper.”
Mersch also singled out Germany, the biggest economy by far among the 18 countries in the eurozone, saying it no longer stood apart against this bleak backdrop.
There was no sign of improvement in its sluggish performance in recent data, he said.
While many politicians hope that this slowdown will put more pressure on the ECB to extend its debt-buying programme to include government bonds, Mersch made it clear that it was instead down to governments to act by making economic reforms.
“The weak growth that we see everywhere is a sign for the need for action across the euro zone,” he said. Mersch flagged the importance of ‘structural reforms’, a term referring to more flexible labour laws, for example.