Created on 17.10.2014

Monetary policy instruments are no magic solution or a "silver bullet" in dealing with the economic problems in the euro area, and it is crucial to observe budget discipline and implement structural reforms – this is the message that ran like a red thread of today's conference titled "Have We Learnt Anything from the Crisis?" and held by Latvijas Banka in Riga with the participation of the Eurosystem policy makers, representatives of international and national institutions and top scholars.

Participating in the annual Latvijas Banka conference on economy were members of the Council of the European Central Bank (ECB) –Ilmārs Rimšēvičs, Governor of Latvijas Banka; Jens Weidmann, Governor of Deutsche Bundesbank; Benoît Cœré, member of the ECB Executive Board; officials of international and national economic policy institutions (International Monetary Fund, European Commission, Government of Germany) and high ranking academics (professor of Warsaw School of Economics Leszek Balcerowicz; professor of international macroeconomics of Dublin's Trinity College Philip R. Lane; chair for macroeconomics and finance of Goethe University Frankfurt Michael Haliassos; professor of monetary and financial economics of Paris-I-Panthéon-Sorbonne Christian de Boissieu).

In the addresses and panel discussions of the conference, the participants sought answers to the questions what lessons have been learnt from the economic crisis of 2008 in individual problem countries and the euro area at large and what measures should be taken to ensure a sustainable and lasting economic growth.

In his address to the conference, Mr. Rimšēvičs was among those who indicated that fiscal or budget and structural policy reforms should supplement the monetary stimuli offered by the Eurosystem. Stability and growth are based on three elements: 1) monetary policy that at the moment provides sufficient funds for lending; 2) fiscal policy that must ensure reducing the debt and investor confidence and 3) structural reforms that are needed to increase competitiveness and stable employment but have been much delayed in the euro area.

The ECB Executive Board and Council member Mr. Cœré stressed that measures promoting both demand and supply are necessary to ensure sustainable economic growth and that they supplement and reinforce each other. He also stressed the need for structural reforms whose positive influence is expressed both directly and indirectly, fostering confidence and future expectations and thus promoting economic growth.

Currently, the challenge for the euro area economy is represented not by the monetary policy of the Eurosystem or the lack of fiscal expansion but structural problems that have a negative impact on competitiveness, innovation and productivity, according to Mr. Weidmann. By resolving the structural issues, the growth potential of the euro area would grow substantially. The governor of the central bank of Germany singled out Latvia's experience in overcoming the consequences of the crisis and taking care of its economy, which could serve as an example when dealing with the current economic problems of the euro area.

For materials of the conference, please refer to