Draghi calls for greater ties between eurozone institutions

(FRANKFURT) - The president of the European Central Bank has called for a "quantum leap" in links between eurozone institutions, warning the region must not rest on its laurels even as he welcomed signs of a recovery.

Mario Draghi said he was "optimistic" about the outlook for the common currency zone, stating during a speech in Frankfurt that: "Most indicators suggest a sustained recovery is taking hold".

"These effects look set to persist for some time, meaning we can rightly be optimistic about the outlook," he continued.

"But this does not mean we should rest on our laurels. On the contrary, a nascent recovery provides us with a window of opportunity."

For the union to be sustainable, he said, "there must be a quantum leap in institutional convergence".

"We need to move from a system of rules and guidelines for national economic policy making, to a system of further sovereignty sharing within common institutions. And as part of this process we need to strengthen the democratic accountability of Europe towards its citizens, which would automatically deepen our political union."

Monetary policy is already helping make this possible, he said, referring to a large quantitative easing (QE) programme launched earlier this month by the ECB.

"But it is now up to governments to seize on this opportunity and make those improvements permanent," he said.

The QE stimulus plan will see the ECB buy 1.14 trillion euros' worth of bonds over the next 18 months. The aim is to pump liquidity into the system so as to ward off deflation and spur growth in the single currency area.

Some analysts predict the eurozone unit could reach parity against the dollar, amid a growing policy divergence between the ECB and the US Federal Reserve.