(Combines stories, adds)
BERLIN, June 18 The co-chief of Germany's
largest bank issued a rare critique of European Central Bank
policies on Wednesday, saying he worried that its decision to
cut rates to record lows and pump money into the euro zone could
remove the incentive for reforms.
Deutsche Bank's Anshu Jain also said in a speech
at the European School of Management and Technology in Berlin
that growth should top the agenda for European governments,
especially in states hardest hit by the euro zone debt crisis.
Jain, who advises governments around the world on financial
issues, said the ECB had played a crucial role in restoring
stability to the euro zone during the debt crisis but now the
onus was on politicians and business.
"Europe has withstood its greatest challenge of the post-war
era... Now we must be under no illusions: the focus must shift
from stability to growth," he said.
It was imperative, he said, that countries with high
debt-to-GDP ratios focused on economic growth rather than
relying heavily on monetary policy.
"I do worry that the ECB may be creating preconditions that
are taking the pressure off," he said, adding that quantitative
easing measures that had been applied successfully in the United
States might not work as well in the European context.
His comments echoed fears expressed by many Germans who have
warned asset-bubbles may form as a result of the ECB's package
of measures which could also discourage reform in crisis-hit
euro zone states. There is a deep-rooted fear of inflation in
Germany where price stability is a creed.
Jain - who forecast that in the next five years, Asia could
grow 36 percent, the United States by 18 percent and Europe by
just 9 percent - said it was vital for Europe to improve its
competitiveness to boost growth.
To do that, Europe needed to tackle high energy prices,
support entrepreneurship and open up labour markets, he said.
(Reporting by Madeline Chambers; Editing by Stephen Brown)