The European Central Bank's monetary policy "bazooka" have been the subject of some strong criticism and, even though some policymakers have sought to defend the bank, the head of Europe Sovereign Risk at Moody's told CNBC that the ECB's policies weren't as effective as they used to be.
"The ECB plays an important role in the eurozone situation," Dietmar Hornung told CNBC on Monday, "but what we are now seeing is that monetary policy, instruments and measures are running into diminishing returns to those activities and that's something to be acknowledged."
"In terms of our ratings, the fiscal space compared to pre-crisis has been eroded to some extent and probably on the monetary side we see similar things and that's why we have our ratings in the eurozone still pretty much at the same (position) that we had them in summer 2012–because we acknowledge that the imminent crisis is over for quite some time but that structural fragilities remain."
Hornung's comments come at a difficult time for the ECB. The central bank is trying to stimulate growth in the 19-country eurozone but the region remains stuck in deflation territory and unemployment remains a mixed picture in the region.
Last March, the ECB launched its own €1 trillion ($1.14 trillion) quantitative easing program and in March this year, upped the ante by cutting its main interest rates further and expanding its massive bond-buying program to €80 billion ($90.3 billion) a month.
Ratings agency Moody's said in March that the eurozone sovereigns' ratings will likely remain stable in 2016-2017 "fading fiscal consolidation, limited progress on structural reforms and rising political risks limit upside potential and create longer-term risks."
Defending Policies
The ECB's monetary policies are not universally popular–especially with German policymakers who are particularly critical of the bank's very low interest rate policies which hurt savers.
ECB President Mario Draghi has defended the bank and, this weekend, ECB policymaker Benoit Coeure hit back at critics, defending the bank's policies in a column in Germany's Frankfurter Allgemeine Sonntagszeitung newspaper, Reuters reported.
The central bank's executive board member said Germany would lose out if the ECB's inflation target or around, but just below, 2% was abandoned. He added that low interest rates and repeated stimulus continued to be critical to supporting employment and activity in eurozone economies.
Other Risks
Moody's Hornung said that the eurozone faced other risks this year with the UK referendum on European Union membership in June and the risk of the UK leaving the bloc, known as Brexit, top the list of concerns.
"There is the Brexit risk, the Greek situation again (Greece and its lenders have fallen out of bailout terms). The difficulties at the European level to come down to policy coordination and policy solution (and that) is a major concern and apart from that we don't really see systemic risks on the eurozone though—it's pretty much in a country-specific mode at the moment, that's why we have all these stable outlooks at different rating levels in the eurozone."
He said Moody's only had two negative outlooks (on the AAA bond ratings) of Austria and Finland. Last year, it downgraded both countries' outlooks from stable to negative, warning of weak and low growth in both countries and debt dynamics.
France Must Do More
France's economy is improving though the country's economic performance lags behind the rest of the eurozone's, with more needed to be done to foster growth and create jobs, Coeure said.
He said French President Francois Hollande is right to say the economy is getting better after an improvement in growth at the start of the year.
That growth is mainly supported by ECB stimulus aimed at reviving inflation, he said, and urged the government to undertake a deeper overhaul of the eurozone's second biggest economy.
"Things aren't going well enough. Growth isn't strong enough to resolve France's problems," Coeure said.
