IT’S NOW UP TO NATIONAL GOVERNMENTS

As the European Central Bank deploys its most powerful economic weapon, the onus for growth now lies with the 19 individual countries in the euro currency union, a fractious and highly political group.

The central bank, though, is stretching the limits of its power with the bond-buying program. And if it is not enough to address what ails Europe, any further stimulus efforts would fall to national leaders. It is now up to national governments to step up their efforts to rekindle growth.

It is crucial that structural reforms be implemented swiftly, credibly and effectively as this will not only increase the future sustainable growth of the euro area, but will also raise expectation of higher incomes and encourage firms to increase investment today and bring forward economic recovery. It is a mistake to suppose that Q.E. is a panacea in Europe, or that it will be sufficient.