(Bloomberg) --
The European Central Bank’s arsenal of stimulus measures is well-stocked, Latvia’s top policy maker said, adding he would favor even more purchases of government bonds if needed.
“There are still plenty of them around,” Ilmars Rimsevics told Bloomberg in an interview after the ECB agreed to cut interest rates and restart quantitative easing. “But we are hoping that the package that was agreed yesterday would re-anchor inflation expectations closer to our target in the coming forecasting rounds.”
The Governing Council pledged on Thursday to buy 20 billion euros ($22 billion) of debt a month for as long as necessary to hit its inflation goal. The decision was taken in a fractious meeting where President Mario Draghi had to overcome stiff opposition from a number of his colleagues including governors representing the euro area’s two biggest economies -- Germany and France.
Austria’s new central-bank governor Robert Holzmann went even further on Friday, saying the ECB’s latest initiative was possibly a mistake and can be changed after incoming President Christine Lagarde takes over on Nov. 1.
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Rimsevics, who is set to retire from Latvia’s central bank in December, said he personally was in favor of resuming QE, and insisted there was “no division or infighting over the decision in the discussions over the package of measures.”
At the same time, Rimsevics sided with Draghi in calling on governments that have fiscal space to step up spending and help boost a flagging euro-area economy.
“The ECB simply can’t do it alone,” the Latvian said. “It will be the job for the next ECB president to convince governments also to do more structural reforms.”
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