The European Central Bank's bond-buying programme will only be effective in helping struggling euro zone states if their governments continue to pursue structural reforms, ECB Governing Council member Klaas Knot told a Dutch newspaper.
Knot, who is also head of the Dutch Central Bank, said in an interview with Het Financieele Dagblad that euro zone countries risk a return to financial market turmoil if they do not follow through with promised cuts and adjustments.
"The new ECB programme can only be effective if governments use the right structural measures," he said, echoing comments made by ECB President Mario Draghi after the central bank's monthly policy meeting on Thursday. "We do not want the market participants expectations anchored on the actions of the ECB. They have to anchor expectations based on what governments do. The markets are responding to the ECB because they expect that it will lead to action in the euro zone."
Noting that the programme announced last month had already helped ease some financial market tensions, Draghi said on Thursday that everything was in place for the ECB to start buying bonds of troubled states such as Spain once an aid request is received. Knot, like Draghi, would not be drawn on whether Spain needs emergency assistance.
"That decision is for the Spanish government. We are now ready with the programme, and now it is up to Spain and other countries to determine if they need it," he said. Spain is seen as the most likely candidate for ECB bond-buying, but so far its government has not formally asked its European partners for aid.