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Mario Draghi calls for policy supports from other areas in a speech today

Speaking at Brussels Economic Forum, in a lecture organized by European Commission, European Central Bank (ECB) chief, Mario Draghi aggressively called for countries to step forward and provide support to ECB’s monetary policy with fiscal supports and reforms to maximize the effect.

Previously, at monetary policy meetings Draghi has repeatedly called for reforms and other policy areas to contribute. However, today’s speech was much more aggressive in nature and kind of an escalation, speaking to Brussels Economic forum.

He said that current austerity policies place all the burden on monetary policies to stimulate the economy and if fiscal policies had been more supportive, it would have been a faster return to potential output. Along with fiscal support, Mr. Draghi also called for structural reforms which would be supportive of growth too. He said, “There are many understandable political reasons to delay structural reform, but there are few good economic ones. The cost of delay is simply too high.”

While Britain prepares for a referendum that many push the country out of EU and Euro-skeptics are on the rise, Mr. Draghi, called for closer integration of the monetary union and current setup incomplete. He believes that it would not only be beneficial in the long run but short run too.

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