Eurozone is witnessing widespread feelings of insecurity, including economic insecurity, that remains a major concern and policymakers need to renew their efforts to boost growth in the euro area, European Central Bank President Mario Draghi said Monday.
"We cannot simply wait for better times: we need to renew our efforts to ensure that Economic and Monetary Union offers protection and prosperity," Draghi said in his opening statement at a hearing before a committee of the European Parliament. "The ECB will do its part."
"Low rates are a symptom of the underlying economic situation," he said.
"They reflect weak long-term growth trends and the protracted macroeconomic slump that has resulted from the crisis."
While the ECB's monetary policy has provided significant accommodation to limit the negative effects, it cannot determine the sustainable level of real interest rates in the long run, as they in turn depend on long-term growth prospects, Draghi said.
"This means that other policy actors need to do their part, pursuing fiscal and structural policies which will contribute to a self-sustaining recovery and increase the economic growth potential of the euro area," he reiterated.
He also stressed on the need to carefully monitor the economic implications of the low interest rate environment.
Describing the "Brexit" vote and its effect a "more recent" challenge, the ECB Chief said the extent to which the economic outlook will be affected depends on the timing, development and final outcome of the upcoming negotiations.
"So far, the euro area economy has been resilient, but due to this uncertainty our baseline scenario remains subject to downside risks," Draghi noted.
"Regardless of the type of relationship that emerges between the European Union and the United Kingdom, it is of utmost importance that the integrity of the single market is respected. Any outcome should ensure that all participants are subject to the same rules."
The ECB's policy-setting body, the Governing Council, will continue to monitor economic and financial market developments very closely and will act by using all the instruments available within its mandate, when warranted, Draghi added.