Speaking last night in Frankfurt, Draghi said lower oil prices and successful structural reforms were helping to bolster the economic growth of the 19 eurozone states.
‘We are meeting against the backdrop of a steadily recovering economic situation in the euro area,’ Draghi said.
‘Confidence among firms and consumers is rising. Growth forecasts have been revised upwards. And bank lending is improving on both the demand and supply sides.’
He said these effects looked set to continue for some time, but warned governments not to ‘rest on our laurels’.
He said the budding recovery provided a ‘window of opportunity’ for governments to press ahead with reforms that would make the eurozone less fragile and vulnerable to shocks.
Yesterday, the bank announced that it had settled €9.8bn of public debt purchases last week as it seeks to inject more than €1 trillion into the eurozone economy.
Under this quantitative easing programme launched in earlier this year, the central bank would buy €60bn worth of public and private sector securities each month until at least September 2016.
This QE plan is expected to increase growth and tackle deflation in the eurozone.
But Draghi said eurozone economies and institutions had not yet ‘converged enough’ to dispel doubts about the harmony of the European Union and guarantee its long-term stability.
‘This is why whenever there is a serious shock in any part of the euro area, questions about the sustainability of the union still arise,’ Draghi added.
‘So the current upturn in economic conditions, which the ECB has helped to generate, must be used.’
Draghi called on Europe’s leaders to take a ‘quantum leap’ in national economic policymaking to a system of further sovereignty sharing within common institutions.
He therefore urged governments to implement structural reforms, particularly in the labour market.
‘We have already seen in the euro area that convergence cannot be sustained if it is not structurally anchored. We had rapid convergence in nominal GDP levels before the crisis, but driven by demand and without an underlying alignment in productivity levels,’ Draghi said.
‘When the cycle turned, those nominal gains largely reversed. Moreover, we are seeing now how convergence can gradually restart when the right structural policies are in place. Those countries that undertook reforms in recent years are starting to see the positive effects come through.’
