LISBON The European Central Bank has played a key role in stabilizing the euro zone but governments must now keep up economic reforms to allow growth in the bloc to "surprise on the upside", a top ECB policymaker said on Tuesday.
Speaking in Lisbon, Peter Praet said the Portuguese economy was now showing signs of stabilization and banks in Portugal were starting to pass on the ECB's easing stimulus to firms and households.
Praet added that the ECB's so-called Outright Monetary Transactions (OMT) bond-buy plan had proved an "extremely effective instrument" in bringing down sovereign bond yields in crisis-hit countries and improving funding conditions.
Germany's top court is referring a complaint against the OMT to the European Court of Justice but, in an apparent effort to direct the ECJ's deliberations, said earlier this month the plan appeared to violate a ban on the ECB funding governments.
"The ECB has been central in stabilizing the euro area economy," Praet, who holds the powerful economics portfolio on the ECB's Executive Board, said in the text of his speech for delivery in Lisbon.
"Looking ahead, the task of all euro area policymakers is to ensure that the improvement in confidence will be validated by actual outcomes," he added.
"If implementation of structural reforms is pursued ambitiously and the reform momentum upheld, it seems likely that growth will surprise on the upside in the coming years."
(Reporting by Axel Bugge; Writing by Paul Carrel Editing by Jeremy Gaunt)