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Monetary policy won't fix Europe's problems: UBS' Axel Weber

UBS Group Chairman Axel Weber.

The European Central Bank needs to recognize that the Europe's needs cannot be solved by monetary policy, according to UBS Chairman Axel Weber.

Weber, who was a member of the European Central Bank Governing Council from 2004 to 2011, stressed that monetary policy is only effective as an "interim solution or an intermediate solution."

"What you have in Europe is, I think, an over-reliance on monetary policy to fix problems," Weber told CNBC's "Managing Asia."

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"Central banks have actually facilitated or at least encouraged other policymakers like finance ministers or those that do structural reforms to somewhat take a relaxed attitude towards acting fast," Weber said, adding that structural changes were essential to lift the growth potential of European economies and gain long-term traction.

Weber is one of a growing number of people calling for policymakers to step up on the fiscal front, as monetary policy seemingly reaches its limits.

In the ECB's September meeting, President Mario Draghi surprised markets by holding interest rates steady and not extending the deadline for its trillion-euro bond-buying program. The ECB's benchmark refinancing rate remained unchanged at 0 percent, while its marginal lending facility rate stands at 0.25 percent, and the rate on the deposit facility at negative 0.4 percent.

The UBS Chairman also added that the private sector needed to be encouraged to invest in Europe's infrastructure, which would help stimulate growth in the region.

"Infrastructure is going to be the buzzword for the next 10 years, not monetary policy,and change the fate of Europe," he said.

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