“The positive developments in the euro area recorded in the financial sphere is not moved fully in the economic,” and the situation in the area “remains difficult.” Mario Draghi is a realist, what, speaking at 24simo European Banking Congress in Frankfurt, reaffirms that the European Central Bank will use all the tools at its disposal, under its mandate to bring the inflation rate to 2 percent. Not only the number one Eurotower also explained that the board is ready “to increase the pressure even more and expand the channels of intervention, thus changing the size, location and composition of their purchases.”
The market reaction
Words that ignite the stock, which had already put the turbo on rate cut of the People Bank of China.
Pink jersey on the stock, which leaps of 3.88% with the FTSE MIB to share 19,954,51 points. Rally for Madrid, the Ibex rises of 3.22% at 10537.9 points. The Frankfurt Dax slipped 2.62% to 9732.47 points, the FTSE 100 in London marks + 1.08% to 6750.76 points, the CAC 40 in Paris gained 2.67% to 4347.23 points .
The purchases were mainly concentrated on the banking sector. Among the most Acciona bought (+ 5.64%), BNP Paribas (+ 4.18%), SocGen (+ 4.38%), Deutsche Bank (+ 3.19%).
The negative outlook
According to Dragons, “it is unlikely a strong economic rebound in the coming months”, and the index of the Pm ‘Eurozone released yesterday proves it. In this context, “the trend of inflation in the Eurozone has become more and more difficult,” he admits. The European Central Bank is “committed to re-calibrate the size, pace and composition of government bond purchases, if necessary, to meet its mandate,” Draghi said, citing specifically the quantitative easing implemented by the Fed and the Bank of Japan . For the banker, there are “a whole series of policies” in addition to the monetary union, for example, on the fiscal and structural, “that may be able to restore growth and inflation on a more solid path, and we must all assume our responsibility. ”
The approval of the Treasury
The Secretary of the Treasury welcomes the words of Dragons. The commitment to do everything possible to support the inflation is “welcome” even though “the real problem is the poor performance of the Eurozone,” says Pier Carlo Padoan Sky Uk, adding that “we need to do more, even by governments. ” A mention also to maneuver. With the European Commission Italy “has a very good relationship,” and “I am confident that the combination of measures will be appreciated,” said Padoan. “Go on – say – the strategy of consolidation of accounts, cutting the tax wedge helps growth, we are very ambitious structural reforms.”
The proposed Berlin
From Berlin, however, comes the proposal Wolfgang Schaeuble: Europe needs’ urgent change Treaties “at least for the eurozone, and need a strengthening of economic governance with a finance minister for eighteen, he says. “I do not want to have to defend the euro over the next five or ten years with the current governance.”
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