The last financial crisis has left Europe with very few tools to address the next economic downturn, the chief executive officer of Dutch multinational DSM told CNBC Tuesday.
The International Monetary Fund warned Monday of risks to economic growth in euro zone countries, coming specifically out of Germany and Italy. However, there are concerns that the sovereign debt crisis and the European Central Bank's (ECB) subsequent bond-buying program have left the region with little options to address another economic crisis.
"We need to realize that from a monetary perspective there is no ammunition left in Europe, (the) interest rate is at an all-time low, and also the QE (quantitative easing) program which we are now building down ... So if we really get to an economic slowdown in Europe, I think the central banks and governments, from a monetary point of view, have no ammunition left to address it," Feike Sijbesma, CEO of DSM told CNBC at the World Economic Forum in Davos.
Following the 2011 debt crisis, the ECB embarked on an asset purchase program to boost inflation and revamp the euro economy. It also kept interest rates at historic lows. Though the bond-buying program ended at the start of this year, interest rates are set to remain low for the majority of this year and will likely only be raised gradually.
"I really hope that Europe will not really get into a problem, because there aren't many tools left," Sijbesma added.
The European statistics office, Eurostat, confirmed last month the 19-member region grew at its slowest pace in four years in the third quarter of 2018. In its latest economic outlook report, the IMF warned that the uncertainty over the U.K.'s departure from the EU is also a risk to the European economy.
