The ECB' monetary policy strategy and structural reforms

There is a mounting discontent in Europe about the conduct of macroeconomic policy in the euro area and especially its policy mix, in the broad sense of the term - the combination of monetary policy, fiscal policy and structural reforms. If the proof of the pudding is in the eating, the weak economic performances of the euro area since 2001 is a testimony that some thing has gone wrong with the reaction of public policies to the financial, confidence and geopolitical shocks which have hit the world economy. In the three years period - 2001-2003 - the average growth rate of the zone would be of about 1%, and the forecast for 2004 is not that of a bright rebound, but of a soft recovery (1.8%). Of course, one can argue that we should not expect from economic policies more than they can deliver. They act at the margin, and they can't prevent much of the consequences of, say, the explosion of a financial bubble which will go its way through the private sector, policy reactions notwithstanding (...).