FRANKFURT (Reuters) - Euro zone growth is gaining momentum but uncertainty is high, partly due to Britain's June 23 vote on EU membership, so the European Central Bank stands ready to act with all instruments if necessary, ECB President Mario Draghi said on Tuesday.
The ECB has provided unprecedented stimulus over the past few years, cutting its rates deep into negative territory and buying 1.7 trillion euros ($1.92 trillion) worth of sovereign and corporate debt to revive growth and inflation.
"Uncertainty remains high and downside risks are still significant due to the continued fragile state of the global economy and geopolitical developments," Draghi told the European Parliament's economy committee.
"We will closely monitor the evolution of the outlook for price stability," he said. "We stand ready to act by using all the instruments available within our mandate, if necessary, to achieve our objective. In particular, the ECB is ready for all contingencies following the UK’s EU referendum."
But Draghi also highlighted the ECB's approved but not fully implemented measures, supporting arguments from policymakers that patience with the bank was needed.
The ECB started corporate debt purchases less than two weeks ago and offers super cheap loans - known as targeted longer-term refinancing operations - later this week, looking to cut borrowing costs for firms.
"Further monetary policy stimulus is in the pipeline," Draghi said. "We expect more firms, including mid-sized companies, to be able to access this source of external finance over the near future as the market for companies' debt expands and deepens."
Draghi argued that investment levels were more than 10 below pre-crisis levels and stressed the need for action to boost growth at the European Union level.
The ECB has long argued that it could not tackle the bloc's economic troubles on it own and has increasingly called for member states to take over some of the burden.