"If inflation remains too low the
The ECB is the only major central bank which did not pursue QE after the financial crisis.
Inflation in the region sits at just 0.5 per cent, the lowest level since 2009 and far below the ECB target of two per cent.
Even the central bank's own forecasters do not believe price growth will return to its target level in the next two and a half years. The report said that there a high risk that low growth and inflation would make it increasingly painful for national governments to service debt.
The IMF's review was also gloomy about the euro area's ability to cut unemployment. In some states, the report showed that growth would have to be three or four times as strong to reduce joblessness, based on their historical records.
Speaking at the European Parliament yesterday, ECB chief
"QE falls squarely in our mandate," said Draghi, adding that the central bank's governing council is "unanimous also in using unconventional measures to address the risk of a too prolonged period of low inflation".
Draghi also made comments opposing recent calls to make the Eurozone's deficit reduction rules less strict, in exchange for structural reform programmes.
"Flexibility within existing rules, using structural reforms on the side... growth-friendly fiscal consolidation means lower current government expenditure," said Draghi.
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