FRANKFURT/PARIS (Reuters) - European Central Bank policymakers are discussing how best to act to revive the euro zone economy rather than whether to do so, ECB board member Benoit Coeure said, as France pressed for a "more suitable" monetary policy for the common currency area.
Coeure, a Frenchman close to ECB President Mario Draghi, said there was support on the bank's policymaking Governing Council for more action, with sovereign bond purchases the "baseline option".
Having largely exhausted its policy tool-kit with its main interest rate at a record-low 0.05 percent, broad-based buying of sovereign bonds -- known as quantitative easing (QE) -- is seen as the ECB's last resort to prevent a slide into deflation.
"I see a broad consensus around the table in the Governing Council that we need to do more" to raise inflation and boost the economy, Coeure told the Wall Street Journal in an interview conducted late on Tuesday and published on Wednesday.
The interview ran shortly after French Economy Minister Emmanuel Macron said President Francois Hollande would call for policy changes at an EU summit this week.
Hollande will urge "a macro-economic policy that is better adapted to the current context, in terms of better coordination of budgetary policies and -- even if one should never talk about this -- wish that, as early as January, a more suitable monetary policy supports our efforts," Macron said.
The ECB's Governing Council holds a monetary policy meeting on Jan. 22.
Draghi said after the 24-member Council's December meeting that it would reassess policy early next year and alter the "size, pace and composition" of the ECB's measures if needed.
Deploying QE would allow the ECB to pump money into the euro zone by intervening in a large, liquid market -- a ploy that could unlock cash for investment, weaken the euro, and reassure markets of the bank's commitment to supporting the economy.
Hawks on the Council led by Bundesbank chief Jens Weidmann oppose QE. However, Coeure said the issue was not whether but rather how the ECB would act.
"It's not that much of a question on whether we should do something, but more a discussion on the best way to do it," said Coeure, who sits on the six-member Executive Board that forms the core of the Governing Council.
"If we want to do more we obviously have to reach out to market segments where there is more liquidity and that is why the government bond market is the baseline option, which doesn't necessarily mean we would only buy government bonds."
Weidmann is concerned that the central bank could end up bankrolling troubled euro zone governments and lose sight of its mandate to keep prices stable.
"I absolutely agree that very low sovereign yields weaken the incentives to run sound fiscal policies," Coeure said, in response to such concerns.
The Wall Street Journal quoted Coeure as adding that the answer was to enforce budget rules set by the European Union, which is outside the ECB's remit.
Writing by Paul Carrel; editing by John O'Donnell and Gareth Jones