The European Central Bank (ECB) on Thursday called on member states to look for measures outside monetary policy to revive economic growth in the euro zone, which is running at around 1.2 per cent, even as the bank kept interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.05 per cent, 0.30 per cent and -0.20 per cent, respectively.
ECB president Mario Draghi, however, said monetary policy alone cannot solve the euro zone's economic problems and called on member countries to take additional actions alongside.
"Monetary policy should not be the only game in town," he told a news conference in Malta, adding, "All countries should strive for growth-friendly fiscal policies."
He said structural reforms are key to the success of monetary policy.
''Monetary policy is focused on maintaining price stability over the medium term, and its accommodative monetary stance supports economic activity. However, in order to reap the full benefits of our monetary policy measures, other policy areas must contribute decisively,'' Draghi said.
While euro zone growth rate averages 1.2 per cent, there is a large gap between countries, which, according to Draghi, is due to the efforts countries had made to make their economies flexible, and particularly at getting debt down.
"It is quite clear that a big stock of debt (hurts) growth," he said.
Looking at the currency bloc's economy, Draghi said there were plenty of negative risks, which would prompt a re-examination of policy by the ECB's December meeting.
"The risks to the euro area growth outlook remain on the downside reflecting in particular the heightened uncertainties regarding developments in emerging market economies, which have the potential to further weigh on global growth and foreign demand for euro area exports, he said.