Economic cost of delaying reforms too high to ignore: Draghi

Bloomberg

Mario Draghi called on politicians to help the European Central Bank’s bid to restore economic health to the region by accelerating reforms.
“There are many understandable political reasons to delay structural reform, but there are few good economic ones,” the ECB president said in a speech in Brussels on Thursday. “The cost of delay is simply too high.”
After more than four years of aggressive monetary easing and unprecedented stimulus measures, the ECB is still far short of its inflation goal and is facing growing criticism over its effectiveness of its policies and the financial-stability risks they may create. Draghi’s comments reflect increasing concern that governments are undermining the central bank’s policies by holding back on reforms, and consequently hurting its credibility.
Draghi said fiscal policy should not work against monetary policy by curbing aggregate demand, and should be seen as a microeconomic tool to enhance growth. He also called for measures to increase workforce participation and to improve productivity, and said the economic and monetary union must urgently be completed.
”If other policies are not aligned with monetary policy, inflation risks returning to our objective at a slower pace,” he said. ”I will only note once more the critical need to restore clarity and confidence on the institutional setup of the euro area. We know that the current setup is incomplete.”