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This article was published April 22, 2016 08:23 hours.
the last change is the April 22, 2016 at 08:32 hours.
FRANKFURT – “We obey the law, not to politicians.” The President of the European Central Bank, Mario Draghi has harshly responded yesterday to the German criticism of monetary policy and also to personal attacks, reiterating that the ECB is independent and that the council was “unanimous in defending the independence of the institution and posture appropriate the accommodative monetary policy. ” According to the European treaties, he recalled, the ECB must ensure the stability of prices in the euro, and not in Germany alone.
The spark of sharp criticism originated from various quarters had been the Finance Minister’s statements , Wolfgang Schaeuble, the low interest rate policy, and even his accusation the ECB to have caused the electoral success, the regional vote last month, the anti-immigrant AfD party. Draghi, who met Schaeuble last Friday in Washington to dinner, for a discussion of what he called “very positive, fruitful, peaceful and very friendly”, noted that the minister then made a partial reverse ( “He was not going to say what he said or did not say what he meant. “) But ECB President also replied to those who asked that to succeed him is a German, that the same policies have been adopted in other parts of the world and in all major countries and that his predecessor, Jean-Claude Trichet French , said that he would do “the same thing as Mario ‘.
a discussion of” educated and lively “is welcome, said Draghi, but criticism that give the perception that the independence of the central bank is at risk can cause postponements of investments. “The result – he said – is that it will take longer because our policies produce results.” Eventually, it will require a further monetary expansion. Chancellor Angela Merkel stepped in yesterday defending the independence of the ECB, but arguing that the debate in Germany is “legitimate.”
But Draghi did not fail also to point out that “monetary policy over the last four years has been the only one to support growth” and that this really needs a strategy, “three-pronged”, as called last week the IMF, with the structural reforms and fiscal policy. This is slightly expansionary in the eurozone at the moment, but ECB President insisted he must be more growth: lower taxes, less government spending and more investment.
The head of the central bank also took advantage of the press conference , in which new measures after the package launched on March 10, to reply to the protests of banks, pension funds and insurance companies, particularly in Germany, against negative rates on deposits with the ECB have not been announced. We are aware of the complexities that this measure causes, he said, but also noted that so far there have been no adverse effects on the profitability of the banking sector and the interest margins. The positive experience, he noted, does not mean it’s worth any level of interest rates, which is played as an admission that the ECB does not push far beyond the current -0.40%. As for the “expropriation” of savers and German pensioners, he responded that if it is clear that pension funds and insurance suffer the effects of low interest rates, is not why I can blame the lowest rates of all that is wrong, as years, in their respective fields. He also mentioned that these institutions have made strong gains in capital on bonds due to the ECB’s policy. Finally, Draghi pointed out that investors should look not at the nominal rates, but real ones, that is, adjusted for inflation, and these are higher than that on several occasions in the past.
The ECB is now being ‘ implementation “of the measures taken in March. It takes “patience” because the measures should take effect, said Draghi, admitting that in the coming months inflation, now at zero, may go negative. The goal is to get closer to 2%.
The ECB president reiterated that if the situation worsens (among dangers cited geopolitical risks, including the referendum in Britain on the output from the European Union), the board is ready to act with all the tools. But these do not include the helicopter money, direct distribution of money to citizens. “We’ve never discussed,” said Draghi, emphasizing the operational difficulties, legal and institutional.
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