ECB's Jazbec urges EU governments to initiate investment
LJUBLJANA (Reuters) - ECB governing council member Bostjan Jazbec said on Monday that the European Commission and EU governments must initiate new investments in order to complement the ECB's quantitative easing policy.
"Central banks cannot initiate credit growth if there is not sufficient demand for new loans," Jazbec, who is also the governor of the Bank of Slovenia, said in an interview with Radio Slovenia.
"The only possible solution are the governments, along with (European Commission President) Juncker's investment plan, which can make use of what the ECB is offering," Jazbec added.
Last month the ECB announced it would buy 60 billion euros of assets including bonds each month from March this year until September 2016 in order to raise euro zone inflation to just under 2 percent.
But Jazbec warned that the ECB action alone would not revive the EU economy unless it was accompanied with a new investment cycle.
Late last year the European Commission's head, Jean-Claude Juncker, unveiled a plan aimed at generating 315 billion euros of investment in European infrastructure projects.
Jazbec also said that all Slovenian banks were meeting EU capital requirements after the largest banks were rescued by the state in 2013 when the government had to pour more than 3 billion euros of its own money into local banks to prevent them from collapsing under bad loans. The move also enabled Slovenia to narrowly avoid an international bailout.
(Reporting By Marja Novak; Editing by Kevin Liffey)
