- tuned by policy settings and that we can simply dial up more or less demand in short order to avoid deviations from some ideal path. reality is inevitably more messy than that and has not always been kind to such fine - tuning notions. as it is, some observers think monetary policy has done too little, while others think it already has done way too much. i think it has been about right for the circumstances. but the bigger point is that monetary policy alone can ’ t deliver everything we need and expecting too much from it can lead, in time, too much bigger problems. much of the effect of monetary policy comes through the spending, borrowing and saving decisions of households. there isn ’ t much cause from research, or from current data, to expect a direct impact on business investment. but of all the three broad sectors – households, government and corporations – it is households that probably have the least scope to expand their balance sheets to drive spending. that ’ s because they already did that a decade or more ago. their debt burden, while being well serviced and with low arrears rates, is already high. it is for this reason that i have previously noted some reservations about how much monetary policy can be expected to do to boost growth with lower and lower interest rates. it is not that monetary policy is entirely powerless, but its marginal effect may be smaller, and the associated risks greater, the lower interest rates go from already very low levels. i think everyone can see that. bis central bankers ’ speeches if i am correct about this, it really is very important that other policies coalesce around a narrative for growth. in this regard, i think the government is on the right track in not seeking to compensate for lower revenue growth by cutting spending further in the short run. of course, some resolution of long - run budget trends is still going to be needed to sustain confidence and that will not be an easy conversation. meanwhile, as often remarked, infrastructure spending has a role to play in sustaining growth and also in generating confidence. i am doubtful of our capacity to deploy this sort of spending as a short - term countercyclical device. the evidence of history is that it takes too long to start and then too long to stop. but it would be confidence - enhancing if there was an agreed story about a long - term pipeline of infrastructure projects, surrounded by appropriate governance on project selection, risk - sharing between public and private sectors at varying stages of production and ownership, and

mario draghi : euro area economic outlook, the ecb ’ s monetary policy and current policy challenges statement by mr mario draghi, president of the european central bank, prepared for the thirty - first meeting of the international monetary and financial committee, washington dc, 17 april 2015. * * * the economic situation and the short - term outlook for the euro area are currently brighter than they have been for several years. various factors are helping to boost confidence that the weak and uneven recovery experienced up to now will gain strength and breadth. the ecb has pursued its price stability mandate with determination so that inflation will return to a level below, but close to, 2 % over the medium term. a strengthened financial sector, an accommodative macroeconomic policy setting, sound fiscal policies and a determination by euro area governments to pursue structural reforms should allow the euro area to embark on a sustainable growth path in a context of price stability. the ongoing recovery, which started almost two years ago, is now more firmly taking hold. euro area real gdp rose by 0. 3 %, quarter - on - quarter, in the last quarter of 2014, driven mainly by domestic demand and especially private consumption. the latest data and survey evidence suggest that the euro area economy has gained further momentum since the end of 2014. looking ahead, the economic recovery is expected to broaden and strengthen gradually. domestic demand should be further supported by the ongoing improvements in financial conditions resulting from our monetary policy measures, as well as by the progress made in fiscal consolidation and structural reforms. moreover, the lower level of the price of oil should continue to bolster households ’ real disposable income and corporate profitability. euro area labour markets are gradually improving. employment continued to grow in the fourth quarter of 2014 and the level of unemployment is continuing to fall gradually from elevated levels. at the same time, the euro area recovery is likely to continue to be dampened by necessary balance - sheet adjustments in a number of sectors and the sluggish pace at which structural reforms are being implemented. while remaining on the downside, the risks surrounding the euro area growth outlook have become more balanced on account of the recent monetary policy decisions, the fall in oil prices and the lower euro exchange rate. hicp inflation in the euro area turned negative in december 2014 mainly on account of the sharp drop in oil prices observed last year. looking ahead, inflation is expected to remain very low or still negative in the coming months. however, supported by