Spanish Prime Minister Mariano Rajoy on Monday call for the European Central bank’s mandate to be extended to allow it to inject money directly into the economy along the lines of the US Federal Reserve, the Bank of England and the Bank of Japan.
Speaking at a news conference after meeting with visiting British Prime Minister David Cameron, Rajoy said that in the same way that individual European Union countries have embarked on a reform agenda, “reforms should also be carried out with the area of the EU” to improve the funding of countries and stimulate growth.
The Popular Party leader said the EU needs to make an “urgent and major effort” to help European partners as witnessed by the case of Portugal where painful adjustments and reforms have been “insufficient” to guarantee its funding.
The Portuguese Constitutional Court knocked back a number of fiscal measures included by the government in its 2013 budget to meet fiscal targets agreed with the EU and the IMF in exchange for its 78-billion-euro bailout, forcing the administration to make further spending cuts.
The EU should be “strong, flexible and have at its disposition instruments that other nations in the world can call on” in reference to the Federal Reserve and the Bank of Japan, Rajoy added.
Germany is frontal opposed to direct monetary injections by the ECB. German Finance Minister Wolfgang Schäuble said Monday that allowing the ECB to print money and flooding the economy with it was not the solution to the crisis.