A top European Central Bank official has warned that another interest rate cut might not be much help for euro zone countries in recession.
This is because the already record low rates are not getting through to businesses and consumers.
Joerg Asmussen, the bank's top official for international relations, said that the "pass-through of rate cuts" would be "limited" since troubled banks are not able to send them on.
He also cautioned that ultra-low interest rates can take pressure off governments and banks to fix their troubles.
"Monetary policy is not an all-purpose weapon for any kind of economic illness," he said in a speech in London that appeared aimed at dampening recently heightened expectations for a rate cut at the bank's meeting next Thursday.
Stocks have risen and the euro has fallen on expectations of a cut. A run of disappointing economic news this week has fueled market expectations that the bank will cut rates from a record low of 0.75% to stimulate the economy of the euro zone countries.
Asmussen is just one vote, however, on the bank's 23-member governing council. And he added that the risks of low rates need to be weighed against the need for emergency measures in a crisis.
ECB president Mario Draghi said April 4 that the bank "stands ready to act" in case an expected recovery later this year does not arrive.
Another ECB board member, German central bank head Jens Weidmann, has said the bank could cut again if there are signs the economy is worsening - remarks that carried weight because Weidmann tends to be skeptical of low rates.
Asmussen echoed recent comments by Draghi that the central bank would find it difficult to carry out monetary stimulus through the purchase of financial assets.
A number of central banks around the world, including the US Federal Reserve and the Bank of Japan, have sought to expand the supply of money in their economies in an effort to boost growth.
Asmussen said such methods were "not easily applicable" to the euro zone because the 17 countries have differing market interest rates and because companies tend to get their financing from banks, and not from bond or money markets. He said governments needed to fix their finances and take action to improve growth.
Although a lot has been done, he said governments still need to push ahead with their reforms and back closer economic ties. "The euro area has to move ahead with deeper union," he said. "Like it or not, the euro area has become the engine of European integration, for its own sake, and that of the EU as a whole."
Asmussen's comments on the need for governments to carry on with their reforms were echoed earlier by Germany's finance minister, Wolfgang Schaeuble, who insisted that Europe can not spend its way out of its economic problems.
Schaeuble told German radio today that "no one is against growth" and that more needs to be done against youth unemployment. However, Schaeuble said "the misery would only start over again" if countries started to run up more debt.
His comments come just a few days after European Commission president Jose Manuel Barroso said the prescription of lower spending and higher taxes may have hit the limits of public acceptance.