The ECB's balancing act

Mario Draghi, president of the European Central Bank, bought eurozone governments more time when he dropped the ECB's benchmark rate to an all-time low of 0.15 percent, imposed punitive interest rates on banks parking their money rather than lending it out, and announced the bank would be injecting 500 billion euros ($682.9 billion) into the markets to bolster lending in crisis countries.

For some, all that is simply not enough. Among the naysayers is the French prime minister.

"This is a clear signal, to be sure, but I wish to see a central bank that goes even further - such as through the direct purchase of assets on the market," Manuel Valls told the French newspaper Les Echos before the ECB's July meeting. "Monetary policy cannot be conducted with interest rates alone."

'Painkillers' for crisis countries

But that is an area where economists' opinions diverge.

Hans-Werner Sinn, who heads one of Germany's largest economic research institutions, the Munich-based Ifo Institute, said the ECB is merely distributing "painkillers to southern European countries that lost their competitiveness in the inflationary credit boom that broke the euro."

Jaime Caruana, head of the Bank for International Settlements, warned eurozone states from abandoning their reform efforts.

"If monetary policy remains too lax for too long, the pressure to reform diminishes," Caruana told Germany's Handelsblatt daily, adding that policymakers should not use the ECB's rate cuts as an opportunity to relax their own reform efforts.

It is mainly France and Italy that want more time to enact reforms.

Growth and employment must be priorities, said the French president, Francois Hollande. Matteo Renzi, the prime minister of Italy, whose country is scheduled to take over the rotating EU presidency in July, is similarly calling for greater efforts to revive the economy.

The heads of state and government signed a pact known as the "Stability and Growth Pact."

"We need both, stability and growth," Renzi said Wednesday in a speech before the European Parliament in Strasbourg.

Economy remains weak

A day before Renzi's speech, the European statistics agency, Eurostat, presented new economic data for the eurozone. The figures revealed that in the first three months of the year, the French economy failed to grow compared to the previous quarter and Italy's economy even shrank by 0.1 percent. For the euro area as a whole, growth was minimal at 0.2 percent.

In contrast, Germany and Luxembourg both witnessed robust growth of 0.8 percent.

Against this background, the ECB's policy of offering cheap money to lenders is pushing many countries to postpone their reforms, believes the Ifo Institute's Hans-Werner Sinn.

The victims of this policy are savers and small investors, Sinn told DW.

The ECB is "harming savers as they're not receiving interest anymore," he said. "This leads to problems later on once they retire."

Millions of people have already lost their jobs amid the debt crisis, the subsequent austerity measures and the collapse of some countries' economies.

According to Eurostat, around 19 million people are without work in the euro area. In May, the average unemployment rate was 11.6 percent, but in Greece and Spain it topped 25 percent.

Finding a cause

Even the International Monetary Fund, which alongside the European Commission and the European Central Bank monitored the reform progress of many crisis states, has said Europe's austerity harms the economy.

Even the popular analysis that the debt crisis in Europe is primarily a question of competitiveness is controversial among economists.

"The differences in competitiveness within the eurozone weren't the problem, nor was high government spending with the exception of Greece," said Richard Portes, a professor at the London Business School and president of the Centre for Economic Policy Research.

The real cause of the debt crisis was rather the capital flows that were unleashed by the euro's introduction and the deregulation of financial markets, Portes wrote last year.

Hans-Werner Sinn, on the other hand, sees the fundamental problem as being directly related to competitiveness, which he said has to be restored by austerity and reform programs.

If it were up to him, he said, the ECB would in the meantime stop distributing "painkillers" to the crisis countries.