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This article was published April 21, 2016 at 16:38.
“Do you think a president no Italian would adopt a different monetary policy?”. Here is the result, moreover, inevitable, of sharp criticism of the Minister of Finance Wolfgang Schäuble to the European Central Bank has led to the center of the discussion two themes that should never occupy the debate about the ECB’s decisions: the people and, above all, their nationality . President Mario Draghi did not, however, been able to avoid talking about it. Because it is obvious that behind the criticism of politicians – and through them to many companies and citizens – Germans is the idea that a president their countryman, a Jens Weidmann or even Axel Weber, would have done differently.
the truth is otherwise: a German president he would be often, too often, in the minority within the board, and he could not impose its vision of the economy to the other partners, complicating things. The long defense of Dragons of politics and the independence of the ECB – with the unanimous support of all the Governing Council – was based on three very facts that are a response to the implication of the “superiority” German setting: the central bank must look at the entire eurozone, and not only to Germany; his mandate was established by the Treaty – on inspiration of the German economic culture, however – and the ECB therefore “obeys the rules, not to politicians”; almost anywhere in the world monetary policy it was similar to that of Europe (on the contrary, one might add, has been slowed its German influence on the setting).
Words, you might think: the economic reality does not look at these things. Not so, not in a mechanical world where certain expectations matter much. “A correct and lively debate is welcome,” said Draghi: allows the central bank is better to explain their choices. “Criticism of a certain type may, however, be interpreted as damage to the independence of the Central Bank” and give a blow to the “perceived credibility”, bring a return of investment and the same demand for loans and then at a slower return of ‘ inflation to normal levels, “and therefore require a more expansionary monetary policy.” In another context it would seem a fit of pique, almost a threat – if the criticism continues, we will react – but it is not so. Unfortunately: the damage of these utterances can be substantial, credibility, reputation in the world of monetary policy (and credit in general) are central; and the independence of the central bank is a tool to assure her.
The defense of Dragons – necessary, but a necessity that you would have done without – has also been extended to insurance and pension funds Germans, fueling the controversy: rates – said the president – are or have been low and everywhere in the United States, for example, pension funds and insurance companies have been less affected, even for the different business model and the different rules . The quantitative easing , however – he added – has their own benefit generated significant capital gains of those companies, which were among the most active sellers. Especially “real rates are now higher than they were 20-30 years ago”: taking into account low inflation, the situation is not so far from the “normal.” Without forgetting that the low rates “are a symptom of low growth and low inflation, not a result of monetary policy.”
It is more difficult to defend the ECB decisions on the basis of the results: inflation is low and “come back negative,” before climbing slowly and expectations remain weak; although the real situation – in the words of the statement of the Board – continues to improve. “We must be patient. We have to wait, “he said several times Draghi, pointing out that the effects of the measures may be delayed. The President returned to emphasize the fact that monetary policy in other countries, runs counter to that of the eurozone and has thus suggested that the euro, up from a year, could return to fall. He also assured that, should it occur an “unwanted tightening of financial conditions that would adversely affect the medium-term outlook, the board is ready to act, using all available tools.”
Even the lever rate? Draghi did not rule out anything, and the press continues to talk about rates that will remain long at current levels “or lower”. The question, however stated, is not that of a ‘yes’ or ‘no’ to a further cut, but to its size: the negative rates – on deposits at the ECB are to -0.40% – did not create problems , even on the profitability of banks ( “in their aggregate,” said the president), but you can not say that things will go so well at any level are taken.
at the moment, however, the ECB it remains focused on the application of measures taken in March. Today were given details of the corporate bond purchases, which will start in June: the ECB will also intervene on the primary market – the issue, then – excluding only the banking stocks (but not those of any case non-bank parent) and the companies asset management, acquiring up to 70% of the issue, with deadlines that vary from six months to thirty years.
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