BRUSSELS: The International Monetary Fund on Monday hailed the progress achieved by the eurozone over the past year in tackling its crisis, but said it needs to do more to sustainably boost growth and employment.
"Policy actions over the past year have addressed important tail risks and stabilised financial markets," the IMF wrote in a new report.
The report was released in Brussels, where IMF chief Christine Lagarde was attending a meeting of eurozone finance ministers to discuss the release of fresh aid to Greece.
"Nevertheless, the centrifugal forces across the euro area remain serious and are pulling down growth everywhere," the fund warned.
"Concerted policy actions to restore financial sector health and complete the banking union are essential" and "deeper structural reforms throughout the euro area remain instrumental to raise growth and create jobs," it wrote.
The European Central Bank in particular, which with its controversial OMT bond-buying programme had helped restore calm to the financial markets, should continue to play a major role, the IMF argued.
"While monetary policy alone cannot address underlying weaknesses in bank balance sheets, it can provide additional funding to avert a further contraction in credit until the more comprehensive actions to restore banking system health take hold," it said.
And given weak growth and subdued inflation, "more monetary easing will likely be necessary to support demand," it said.
The ECB has cut its interest rates to new all-time lows, but the bank's president Mario Draghi has suggested that borrowing costs could go even lower if the situation warranted.
"Further policy rate cuts ... would support demand across the euro area and address deflationary pressures," the IMF said.
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