“We can not afford not to solve” the problems of the banks. This was stated by the President of the ECB Mario Draghi, as reported by Bloomberg citing a document obtained at the EU summit. “It’s time to do it,” he says. The Brexit, Draghi continues, may trigger a race to the competitive devaluations of the currencies around the world. “We fear the reactions – he says – of countries who try to correct what they see as a wrong exchange rate, which could trigger competitive devaluations and increased risk premiums and turbulence.”
The Brexit can have a negative impact on GDP growth in the euro zone, still says ECB President Mario Draghi as reported by Bloomberg. The output effects of Britain are difficult to predict, but could cause a negative impact of 0.1% in 2016, 0.2% in 2017 and to 0.5% in 2020, still Draghi said, according as is learned from EU sources in the margins of the European Council. The same sources added that the ECB President has referred to as the United Kingdom is the largest trading partner of the euro area and that the estimates on the possible lowering of rates of growth of GDP in the next three years are those made by the private sector. The fact that they evoked means that according to the ECB, it is reliable forecasts.
The Barclays alarm, UK in recession in 2017
If Britain were to end in recession, says the document obtained by Bloomberg, the effect on the euro would immediate. All international markets, he said Draghi, would be affected especially foreign exchange.
The ECB has so intensified its cooperation with other central banks on currency movements and, he assured, will do everything necessary to ensure the price stability. Outside “you could have the perception that the EU is ungovernable, for this is crucial commitment of States to work together,” he said still Draghi to EU leaders at the summit on Brexit, according to European sources report.
“in the current environment of prolonged low interest rates, the European banking system could be the weak link in the chain”
According to other sources, Draghi has dwelt much on the subject of banks indicating that the current context of prolonged low interest rates, the European banking system could be the ring weak chain. This is due to the weight of the “non-performing loans” and decreased profitability of the banking business. Among other things also weigh negatively on the banking system of the lower growth outlook as a result of Brexit.
The UK should move next year from an expected growth of around 2% to zero growth.
“The disappointing outcome of the G20 to boost global economic growth of 2% with structural measures is an example of how the intentions and actions can differ,” he says Draghi stressed that “it is in contrast to what happened in the case of the global coordination of the budget in 2008-2009, which was a success. ”
Dragons: align the global monetary policies to promote growth
The number one ECB added that these kinds of international formats, such as the G20, can not “bind countries to take specific measures but the mutual recognition of a common interest can be a form of coordination.
<'p> the composition of the Eurozone budgets should be more “friendly growth”: it is the invitation by ECB President Mario Draghi to EU leaders, according to European sources report.
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