Time to end economic stimulus says senior European banker

Governments should start removing economic support and make sure they have budget surpluses, a senior European Central Bank figure warned.

Yves Mersch, a member of the bank's governing council, said emergency funding would only work in the short term and structural, growth-boosting reforms were needed.

"Now the time is near for policy makers to withdraw economic stimulus at a moderate but steady pace," he said in an article for the Wall Street Journal.

Mersch, who also heads Luxembourg's central bank, added: "Temporarily, stabilisation measures might work as a parachute; they will fail, however, as an engine of economic growth in the longer term."

He urged governments to adopt stricter budget discipline measures to tackle public debt-to-GDP ratios that are projected to rise to more than 100% this year.

"Governments need to bring public finances onto a sustainable track. Rather than timidly reducing budget deficits, governments will have to achieve surpluses in order to erode massive debt mountains," he said.