* Rajoy says Europeans should discuss issue in next months
* Germany has repeatedly damped talks on new ECB powers
By Julien Toyer
MADRID, April 8 Spanish Prime Minister Mariano
Rajoy said on Monday that Europe should look at changing the
powers that the European Central Bank has, to align it more with
other monetary authorities around the world.
"I believe that in Europe among all of us, we should look at
whether the ECB should have the same powers as the rest of the
world's central banks," Rajoy said in a news conference.
"We should give ourselves the instruments that other
countries have," he said, answering a question about the shift
in monetary policy recently decided by the Bank of Japan.
The founding treaty of the ECB gives it a primary mandate of
price stability, which the central bank's policymaking Governing
Council has taken to mean prices rising by close to, but below,
2 percent a year.
The treaty also states that the ECB may, if price stability
allows, also "support general economic policies". Any change to
the ECB's mandate would have to be signed off by all 27 EU
During the euro zone debt crisis there have been calls to
widen these powers but Germany has sought to damp any discussion
on the issue, including a latest attempt from France earlier
A barrage of monetary stimulus unleashed last Thursday by
the Bank of Japan has revived such talk.
A U.S. Federal Reserve policymaker, Atlanta Fed President
Dennis Lockhart, noted the BOJ's latest move left the ECB as the
least accommodative of the developed world's big three central
Some other major central banks have a more flexible mandate.
For example, the U.S. Federal Reserve has a dual mandate of
maintaining both low inflation and low unemployment.
The European Central Bank has pledged to support debt prices
for euro zone countries that sign up to an international aid
programme. But unlike the BoJ and other major central banks, its
arsenal of stimulus measures does not currently include a
quantitative easing programme of sovereign bond purchases.
Last week, at his monthly press conference, ECB president
Mario Draghi dismissed such talk and put the ball in the states'
"I think one should always be mindful of what the ECB can do
and what it cannot do. We cannot replace capital that is lacking
in the banking system. That is quite clear. We cannot compensate
for lack of action by governments," he said.
"The ECB cannot replace governments' lack of action on the
structural reform front."
Since he took office in late 2011, Rajoy has been a major
proponent of a banking union that would put the banks of the
17-member euro zone under closer supervision by the ECB and that
would aim to sever the link between sovereign borrowers and
He has also repeatedly called for Europe to take more
measures to stimulate growth. But on Monday he declined to
detail what measures he has in mind.
A government source told Reuters last week Spain would this
month revise down its economic growth forecast for 2013 to a
fall of 1 percent in Gross Domestic Product and seek more time
from the European Union to reduce its budget deficit as
recession cuts deeper than previously expected.
The source said the government would also forecast economic
growth of 1 percent in 2014. Rajoy said a change of gear in
Europe economic policy would help meet this target.