October 3, 2019 / 8:26 AM / 12 days ago

Euro zone fiscal stimulus needs to play more substantive role: ECB

FILE PHOTO: European Central Bank (ECB) Vice-President Luis de Guindos speaks during a news conference after the informal meeting of ministers for economic and financial affairs (ECOFIN) and Eurogroup in Helsinki, Finland, 13 September 2019. Lehtikuva/Emmi Korhonen via REUTERS/File Photo

FRANKFURT (Reuters) - Fiscal stimulus needs to play a more substantive role than usual in boosting the euro zone economy, but the current framework for spending is insufficient to deliver the needed boost, European Central Bank Vice President Luis de Guindos said on Thursday.

Calling for a sizeable and agile centralized fiscal capacity in the euro zone, de Guindos said this would ensure that the bloc could better react to future threats.

“A dedicated centralized fiscal capacity would not interfere with domestic policy,” de Guindos said in Madrid. “By focusing on common area-wide stabilization it need not affect national fiscal space but rather provide an additional layer.”

Reporting by Balazs Koranyi; editing by John Stonestreet

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