LJUBLJANA (Reuters) – Data shows the decision of the European Central Bank (ECB) to prolong its quantitative easing program until the end of 2017 was correct, ECB governing council member Bostjan Jazbec said in an interview published on Saturday.
“The decision of the ECB to continue with purchasing of securities until the end of the year 2017 determines monetary policy and enables normal functioning of the eurozone,” Jazbec, who has also been governor of the Bank of Slovenia since 2013, told Slovenian daily newspaper Dnevnik.
“Data shows that the ECB has been taking the right decisions.”
He said low long-term interest rates were a consequence of a lack of productivity growth, trade flows and the ageing of populations, over which the ECB had no influence.
“We can only influence short-term interest rates,” said Jazbec, calling for other policies to help economic growth.
Jazbec also said Slovenia’s bank overhaul in 2013 would probably have been cheaper and would not have included the cancellation of 600 million euros’ worth of subordinated bonds of troubled banks if it had taken place earlier, adding that the banks’ problems began before that year.
In 2013 the government poured more than 3 billion euros into Slovenian banks to prevent them from collapsing under bad loans which amounted to about a fifth of all their loans, and the country narrowly avoided an international bailout.
(Reporting by Marja Novak; editing by Andrew Roche)