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By Bloomberg

When Mario Draghi reminds politicians of the importance of economic reforms, the European Central Bank president has fresh evidence to make his point.

Data published on Tuesday showed unemployment in Germany, reaping the benefits of an earlier revamp of labor rules, fell to a record low. In reform-laggard Italy, the jobless rate unexpectedly rose and the country’s inflation rate turned negative. A separate report showed a slump in euro-area consumer prices eased in March.

Draghi has repeatedly criticized governments for backsliding on the structural adjustments he sees as critical for a sustained recovery. He told European lawmakers last week measures must be implemented “promptly and with determination” if ECB monetary stimulus is to be fully effective.

“It is still a long way for the euro zone toward materially reducing slack in the economy,” said Christian Schulz, senior economist at Berenberg Bank in London. “Cheap oil, a weaker euro and aggressive ECB easing will boost growth this year and accelerate the normalization processes, but only countries with reformed labor markets will enjoy the benefits fully and sustainably.”

Corporate Meeting

Draghi has the opportunity to convey his message to euro- area company heads this week. ECB policy makers will meet with corporate leaders in Frankfurt on Wednesday morning, according to people familiar with the matter, who asked not to be named as the meeting is private. An ECB spokesman declined to comment.

Later the same day, the Governing Council will hold a scheduled session at which it’ll discuss progress on Greece’s reform proposals and emergency liquidity for Greek banks. It’s not set to announce an interest-rate decision.

Euro-area unemployment was 11.3 percent in February, the European Union’s statistics office said. The jobless rate for January was revised higher to 11.4 percent from 11.2 percent.

Italy’s rate increased to 12.7 percent in February from 12.6 percent. In contrast, Germany was at 4.8 percent. The country’s Federal Labor Agency, which uses a different calculation method to the EU, on Tuesday reported a record-low rate of 6.4 percent for March.

The Frankfurt-based ECB has pledged to do its part to revive the euro-area economy by boosting inflation back to its goal of just under 2 percent. To do so, it’ll buy 1.1 trillion euros ($1.2 trillion) of assets including government bonds through September 2016.

Pressures Easing

Tuesday’s figures signaled that deflationary pressures are easing. Consumer prices dropped an annual 0.1 percent in March, compared with minus 0.3 percent in February, though that’s still the fourth consecutive reading below zero. Italy’s inflation rate fell to minus 0.1 percent from 0.1 percent.

Core inflation in the euro area slowed to 0.6 percent in March from 0.7 percent. Energy prices fell an annual 5.8 percent after a 7.9 percent decline in February.

Bundesbank President Jens Weidmann, who opposed quantitative easing, has argued that consumer prices would pick up anyway as the drop in energy costs adds to previous ECB action in stimulating the economy.

“The inflation rate is set to rise again over the course of the year, mainly because oil prices will start increasing at some point as well,” said Marco Wagner, an economist at Commerzbank AG in Frankfurt. “The latest ECB measures might of course have an effect as well, but it’s probably minor.”

‘Hard Slog’

Economists surveyed by Bloomberg forecast euro-area consumer prices will remain unchanged this year before rising 1.2 percent in 2016. The ECB projects stagnant prices for 2015 and sees inflation at 1.5 percent in 2016 and 1.8 percent in 2017.

In Spain, which has pushed through reforms and where the inflation rate has been below zero for nine months, the slump in consumer prices moderated in March. The rate was minus 0.7 percent, compared with a record low of minus 1.5 percent in January, data showed on Monday. In Germany, the rate turned positive for the first time in three months.

“Even if the euro zone does imminently exit deflation, it may still prove to be a hard slog,” said Howard Archer, chief European economist at IHS Global Insight in London. “Underlying inflationary pressures across the region look set to be limited for some considerable time to come because of the constraining effects of extended muted economic activity, large output gaps in many countries and still relatively high unemployment.”