Governments not doing enough to raise confidence in future: ECBFebruary 12, 2015 - 14:08 AMT PanARMENIAN.Net - A top European Central Bank official says the bank's new 1.1 trillion euro ($1.2 trillion) monetary stimulus could "fall on barren ground" if governments do not cut red tape and excessive regulation, the Associated Press reports. The bank will start purchasing government bonds with newly printed money next month, a step aimed at increasing alarmingly low inflation and warding off long-term stagnation. ECB executive board member Peter Praet said in the text of a speech in London on Thursday that "perhaps the biggest risk we face with our new measures is that they fall on barren ground because governments are not doing enough to raise confidence in the future." The ECB announced the stimulus Jan 22 in an effort to raise growth and an alarmingly low rate of inflation. Prices in the 19-country euro currency union fell 0.6 percent annually in January. The stimulus should lower interest rates even further. Some bond-market yields have even fallen below zero ahead of the start of the program. Praet said monetary policy can increase returns on starting a new business by lowering the cost of the capital needed to start it. Government reforms, he said, would raise the returns on the business, "for example by reducing costs arising from unnecessary red tape." Eurozone governments such as France and Italy have been slow to implement so-called structural reforms that clear away excessive regulation on hiring and firing people and the mounds of paperwork required to even start a business. Praet singled out Spain as one country that has tried such steps and seen a faster recovery. "If we take advantage of the window of opportunity that exists today, that possibility is there for the whole euro area," he said. The eurozone is struggling to overcome troubles over high government debt in several countries and slow growth. Greece, one of the hardest hit, is trying to negotiate with other eurozone governments for new terms on its bailout loans that would place less emphasis on budget austerity and more on re-starting growth. Related links: Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Putin congratulates Pashinyan’s birthday Russian President Vladimir Putin congratulated Armenian Prime Minister Nikol Pashinyan on his birthday on June 1. Opposition motorcade en route to Gyumri for large rally A motorcade of protesters headed by Archbishop Bagrat Galstanyan is heading to the city of Gyumri. Ruling MPs, Foreign Minister talk Armenia-Azerbaijan processes MOs from the ruling Civil Contract party met with the Foreign Minister Ararat Mirzoyan in the Armenian parliament. Russia: Armenia’s frozen membership weakens CSTO position in Caucasus A Russian envoy said any step that could alienate the CSTO member states from each other is “deeply wrong”. |