ECB official: Monetary policy can't boost long-term growth, calls for pro-investment reforms

Industries Associated Press

A member of the European Central Bank's rate-setting council has said monetary policy cannot boost long-term growth and called instead for reforms by governments to make the weak economy more investment-friendly.

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Jens Weidmann said in the text of a speech in Madrid on Monday that low interest rates and stimulus measures can boost short-term demand but that central bank action "cannot permanently boost growth prospects."

Weidmann, who also heads Germany's Bundesbank central bank, said that long-term growth depended on countries' willingness to lower barriers to investment by streamlining bureaucracy and rules on hiring and firing.

His remarks follow a speech last week by ECB President Mario Draghi in which he said the bank was ready to do more to boost the struggling economy.