Draghi calls from euro-countries common reform initiative – Reuters Germany

Draghi calls from euro-countries common reform initiative – Reuters Germany

Berlin (Reuters) – Following the announcement flood of money the Fed ECB President Mario Draghi called on the euro-States to common reforms.

Members the currency area should be a “real economic union” take decisions and implement uniform across institutions, he wrote in the “Business Week”. Also Union parliamentary leader Volker Kauder warned that the bond purchase program solve any structural problems. The critics of the ultra-loose monetary policy to hope that at least slows the Bundesbank Draghi.

The ECB announced bond purchases in the amount of € 1.1 trillion well on Thursday. Draghi seeks to prevent the euro zone slipping into a fall in prices across the board (deflation), which would hurt the economy. The base rate of the ECB is already near the zero line. Opponents of the proposed flood of money fear that these paralyzes the reforming zeal, especially in the southern European countries, but also in France, because the government can borrow money at low interest rates.

Draghi took up the criticism and appealed to the policy. Economic reforms so far are largely a matter of individual states. In future, the euro-countries should be able to oblige governments to reform in an economic union. Thus, the mere economic union demonstrate that these countries could actually overcome by growing debt. The possibilities aimed at price stability ECB were limited, Draghi said. With its monetary policy, they could not cope with shocks, which concern only one country or region.

As an example for closer cooperation Draghi called the planned EU capital market Union. A compilation of the financial markets is a condition that the private sector will more involved in financial risks. EU Financial Market Commissioner Jonathan Hill wants to publish in February a proposal. The European Commission wants to create a cross-border European capital market in the next five years.

CSU CALLS FOR MORE INFLUENCE OF THE FEDERAL BANK

On structural reforms CDU politician Kauder aims. He warned in the “Stuttgarter Zeitung”. Overall, Europe is not competitive and not particularly innovative enough “to change that, should the EU deal, but above all the different countries from his faction was again criticized the ECB’s program financial umpire.. Hans Michel Bach (CSU) told Handelsblatt Online, Draghi wants citizens “for an idiot” and conceal the risk of liability, the Bundesbank, he called for a boycott. “Making a purchase of government bonds by the Bundesbank can not give it.”

Bavarian Finance Minister Markus Söder (CSU), called the “Rheinische Post” more voting rights for the Bundesbank in the Governing Council. “We adhere to almost 30 percent. Accordingly, our share of the vote must be strengthened. “Bundesbank President Jens Weidmann said the” image “that he saw the Governing Council decision skeptical. The purchase of government bonds mountains risks. With the program, the central banks were among the largest creditors of the Euro- States. “This poses the risk that solid households is neglected,” warned the central bank president.

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