ECB's Draghi calls for reform, points to Europe's modest prospects

By John O'Donnell and Axel Bugge SINTRA, Portugal (Reuters) - The president of the European Central Bank reiterated his call on Friday for euro zone countries to reform their economies, warning that future growth would remain modest. Easy financing should not stop reform, he said. "It should ... be clear that the argument that accommodative monetary policy constitutes an excuse for governments and parliaments to postpone their reform efforts is incorrect," Mario Draghi said. In making his appeal, Draghi warned countries that Europe still faced difficult times ahead, despite the boost that the ECB's money printing is giving the economy. "The economic outlook for the euro area is brighter today than it has been for seven long years," he said, before pointing to high levels of debt in parts of the euro currency bloc and entrenched high unemployment that he said "haunts too many countries". "A cyclical recovery alone does not solve all of Europe’s problems," Draghi told an audience of central bankers and academics at an event organised by the ECB in Portugal. "While some of the effects of the crisis on investment and employment are expected to unwind, potential growth is projected to remain well below pre-crisis growth rates," he said. (Reporting by John O'Donnell and Axel Bugge; Editing by Jeremy Gaunt)