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This article was published March 17, 2015 at 06:35.
Frankfurt
It is not true that the accommodative monetary policy of the European Central Bank eurozone discourages governments from making the reforms. The reform of the labor market in Italy, the Jobs Act, introduced after the announcement of Quantitative easing by the ECB, is one example.
The ECB president, Mario Draghi, has contended last night, in a speech in Frankfurt, criticism, coming mainly from the Bundesbank, that one of the greatest risks of monetary stimulus is the paralysis of economic reforms, given that governments are taking advantage of better financing conditions. “The fact that we now have an extremely accommodative monetary policy – said Draghi, who also cited the positive cases of Spain and Portugal – is not a disincentive to continue with the reforms. For example, Italy has introduced a major reform of the labor market since the ECB announced its latest measures. In fact, monetary policy creates an incentive for reform. ” The countries that make structural reforms today, according to Draghi, will materialize the benefits more quickly, as these reforms will strengthen the impact of monetary policy, in particular where there is investment demand accumulated. And a stronger economy in the short-term cost of the reforms will be lower.
Draghi has described a scenario in which you can be “rightly optimistic”, as the economy recovers, the increase the confidence of consumers and businesses, the upward revision of growth forecasts, the improvement of the credit. The more optimistic outlook, however, do not have to rest on our laurels, but to be exploited for a “leap forward” in the economic convergence and institutional.
The ECB yesterday confirmed the figures for the first three days of purchases public securities, revealed last week by the councilor responsible for market operations, Benoit Coeuré: the total is 9.75 billion euro. Purchases of Thursday and Friday are not included in this figure as it does not yet settled. The goal is to reach 60 billion euro monthly purchases, although this month the operation started on day 9. The program, which will run until at least September 2016, aims to be traced from the current inflation – 0.3% to 2%. According to the new provisions of the ECB, inflation in the eurozone will come to 1.7% in 2017.
On the situation of the eurozone continues to weigh the Greek case. In a move soothing tensions of recent weeks, German Chancellor Angela Merkel called on the prime minister yesterday greek Alexis Tsipras in Berlin: the meeting, the first bilateral agreement between the two, will take place Monday. The finance minister, Wolfgang Schaeuble, however, has repeated last night the German position, according to which the new government in Athens has destroyed with his attitude the trust of European partners and lied to voters, arguing that Greece’s problems have their roots outside from the country. “No one has yet figured out what that the greek government,” he said. In Germany, then continues to hold court on the controversy Minister Yanis Varoufakis, who on Sunday took part in a broadcast on TV and has been shown in the recording of an old speech while performing his middle finger to the Germans. A fake video, the minister said, but the German television claimed that there had been no manipulation.
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Exchange rate euro / dollar
DESIRED EFFECT
Adjustments currency
Although not explicitly (exchange rates are not part of the political ECB) one of the effects most desired by the operation of monetary easing known by the name of Qe, is undoubtedly the decline of the single currency. A depreciation of the euro, in addition to increasing the competitiveness of exports with positive effects on economic growth, should result in a rise in inflation. Objective “institutional” the Qe is indeed to bring inflation, currently in negative territory (-0.3%) to a level close to the reference of the ECB: prices below “but close” to 2%. According to many analysts, the parity between the euro and the dollar is not far away.
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