FRANKFURT (Reuters) - European policymakers should not give up on efforts to make their economies more efficient and stick to budget rules, despite a strong protest vote in European Parliament elections, the ECB’s Yves Mersch said on Saturday.
With far-right, anti-EU parties sweeping to unprecedented victories in France, Britain and Denmark and populists gaining ground elsewhere, political leaders face tough questions about the future direction of European integration.
Mersch, a member of the European Central Bank’s Executive Board, said it was essential to move ahead with structural reforms now, to finish what was started in 1999 and make the euro zone work.
Otherwise, he said, “on our current reform-resistant course, I see a distant but distinct probability that (economic) growth in the euro area begins a secular downward drift”. Most estimates found that potential euro zone growth had diminished during the crisis.
“This is why moving ahead with structural reform is essential,” Mersch said in the text of a speech.
”We have done much to stabilize the euro area with banking union and other reforms; but now we need to find ways to make the euro area sustainably grow.
“Voters in Europe have overall given policymakers a mandate to do this; we have a pro-European majority in Parliament. If we do not seize this mandate, however, they may not provide another one,” said Mersch.
Reporting by Eva Taylor; Editing by Ruth Pitchford