Frankfurt (dpa) - The European Central Bank‘s policy of cheap money for financial markets is running up against its limits but would be more effective if countries pursued economic reforms, a top ECB official has warned.In remarks reported Thursday, a day after talking with journalists, ECB board member Yves Mersch said, "We still have some ammunition left. But the effect would be much greater if the necessary reforms would be undertaken."Mersch then conceded, "I cannot deny that one is feeling a certain reform-weariness on the part of some countries."His comments came a week after the ECB extended by another six months, until at least March 2017, its Asset Purchase Programme (APP) - also called quantitative easing - of purchasing euro-denominated municipal and regional bonds, thus assuring cheap liquidity for member states.Some critics charge that the programme, in which the ECB each month pumps some 60 billion euros (65 billion dollars) into the financial markets, takes the pressure off eurozone countries from undertaking necessary structural reforms.Mersch said the majority of ECB council members believes that the measures implemented so far were working. Without the ECB‘s intervention "we would have slid into deflation."The ECB‘s target inflation rate is 2 per cent, but core inflation is currently running at half that despite the cheap-money policies aimed at boosting the economy and driving prices up. At the same time, the bank‘s key lending rate remains at a record-low 0.05 per cent.
