European Central Bank (ECB) Executive Board member Yves Mersch said in a speech on Thursday that productivity in the Eurozone was driven by job cuts.

"Much of the (meagre) productivity growth seen in the euro area has come through labour shedding rather than from strong value added growth. And if those displaced don't have the right skills to find another job, structural unemployment is likely to increase further, or they will be forced to consider low productivity sectors, and then aggregate productivity growth will stagnate once more," he said.

Mersch pointed out that there are further possibilities of monetary policy easing, adding that the central bank's toolbox is not exhausted.