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Europe needs structural reform to boost growth: Australia's Hockey

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Europe needs to undertake structural reforms to boost growth and should not rely on further monetary easing by the European Central Bank, Australian treasurer Joe Hockey said on Monday. - PHOTO: REUTERS

[London] Europe needs to undertake structural reforms to boost growth and should not rely on further monetary easing by the European Central Bank, Australian treasurer Joe Hockey said on Monday.

Speaking at an industry event in London, he said there was limited capacity for global central banks to go further with monetary policy and boost growth. "In the case of specific initiatives taken by the ECB, they are sophisticated and targeted, but growth in Europe is going to come from structural reform," he said.

The ECB has cut its main interest rate to 0.05 per cent and has said it is prepared to take other measures, if necessary, to fend off the threat of deflation in the 18-member euro zone.

ECB President Mario Draghi called in a statement on Friday for fiscal consolidation and structural reform, saying these steps would help support business and consumer confidence.

Hockey also commended Italy's labour market reforms, passed in a parliamentary confidence vote last week, and warned against any easing of fiscal policy. "Loose monetary policy actually helps the rich to get richer ... we've seen rising asset values and wealthy people hold those assets," he said. "It is a very blunt instrument." REUTERS