Draghi after the shock of Qe: redouble efforts on reforms … – Il Sole 24 Ore

Draghi after the shock of Qe: redouble efforts on reforms … – Il Sole 24 Ore

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This article was published January 24, 2015 at 10:55.
The last modified on 24 January 2015 to 11:20 hours.

The governments of the eurozone countries need to redouble their reform efforts to create a “genuine” economic union. These are the words the president of the ECB, Mario Draghi, in an article that will appear in the German periodical WirtschaftsWoche and which Reuters anticipates some steps.
“By asking the governments, in the context of an economic union, to adopt structural reforms, it gives credibility to their actual ability to reduce debt through growth, “writes Dragons to two days after the launch of the program of Quantitative easing.

On Thursday, the ECB has opened a new era in its over 15 years of life with the launch of a plan that Quantitative easing is to create money to the tune of 60 billion Euros per month – of which 45 billion through the purchase of government bonds – from March until at least September 2016 . A maxi-injection of liquidity by over one million that should have a triple effect: further bring down interest rates, already at minimum, push the banks to give more credit to the economy and devalue the euro.

The plan was approved by a large majority, but with the significant opposition of the two German members of the Governing Council: Jens Weidmann, president of the Bundesbank, and Sabine Lautenschaeger, one of the six members of the board. Germany is concerned that the purchase of sovereign bonds disincentives governments of the euro by efforts to increase the competitiveness of their economies.

Each Member State, Draghi writes, must be “in a position to draw benefit “from the common market” to attract capital and create jobs. For this we need structural reforms that promote competitiveness, dismantle bureaucracy and increase the adjustment capacity of labor markets. ” Nevertheless, points out the number one Eurotower, an economic union is based on a common interest: “For this there are important arguments in favor of the joint operation of sovereignty in this area, as part of a genuine economic union. Tighter integration continues Draghi, will also allow better sharing of the risk in the private sector. ‘The sharing of risk, “warns the president of the ECB,” requires first of all a strengthening of the capital markets, particularly the equity markets; for this we have to move forward quickly with the union of the capital markets. “

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