FRANKFURT, Germany (AP) – The head of the European Central Bank says the economy in the 19-country eurozone is not showing signs of a rebound and urged governments to help by spending more on top of the central bank’s latest package of stimulus measures.
Mario Draghi said in remarks Monday before the European Parliament’s economic and monetary affairs committee Monday in Brussels that recent data “do not show convincing signs of a rebound in growth in the near future” and that risks are “tilted to the downside.”
He urged governments that were in good financial shape to “act in an effective and timely manner.”
Draghi’s pleas have met a cool response from governments. Germany, the largest euro member state, has rejected the idea of borrowing more to investing in infrastructure.
The central bank, which sets interest rate policy for the countries that use the euro, announced on Sept. 12 an interest rate cut and a new program of bond purchases that aim to boost lagging growth and inflation.
The eurozone economy grew only 0.2% in the second quarter from the previous quarter, while Germany shrank 0.1%. That puts the country on the edge of a recession, defined as two straight quarter of shrinking output. Nonetheless, Chancellor Angela Merkel said that a package of measures announced to combat climate would not involve new borrowing and that the government would stick to its balanced budget policy.