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Thursday, January 01, 2015
The new year begins for monetary authorities with serious concerns: the common area of the Europeans, problems are emerging in the development of prices. ECB President Draghi speaks of significantly higher risks.
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That does not sound good: The European Central Bank (ECB) after presentation of central bank chief Mario Draghi at maintaining price stability demanded stronger than it was six months ago. “The risk that we will not fulfill our mandate of price stability, at least higher than six months ago,” the ECB president said in an interview with the newspaper “Handelsblatt”, the excerpts from the interview published in advance.
The inflation rate was lying in July averaged 0.3 percent, Draghi explained the sheet. The ECB but was in “technical preparations to change the scope, pace and composition of our measures the start of 2015, this should be necessary to respond to a too long period to low inflation”. In it there is unanimity in the Governing Council.
The risk of deflation, or a decline in prices and wages, was “not entirely ruled out, but it is limited,” said Draghi. If inflation but long remain too low could “put people to further reduced in price and easy to move their spending.” It was not ready yet. “But we have to go against this risk.”
Monetary Policy only half
The ECB sees price stability own standards According guaranteed if, inflation in the area just under two percent moved. Draghi explained that the purchase of government bonds is one of the tools that can make use of the ECB to fulfill its mandate. However, it should not come to public finance. Thus, the ECB chief went on the weighty concerns of his critics, who have repeatedly pointed out in this connection, to the limits of the mandate of the central bank.
In an interview with the newspaper Draghi also went to the obligations of the State and Government. Europe’s top central bankers again demanded structural reforms in Europe, especially flexible labor markets, less bureaucracy and lower taxes. Here you’ll be “clearly too slow” progress. All countries in the euro zone would have to do more, and Germany. The monetary policy of the ECB would be much more effective governments “no plan B” would implement structural reforms.
No exit from the euro,
The “moderate recovery” in Europe go, Draghi said , However, it is fragile and uneven. Nevertheless, he was confident that the economy will grow in all countries of the euro zone this year. For then he was cautiously optimistic.
More about“We believe that the combination of expansionary monetary policy and government reforms will bring back much of the lost confidence.” Europe was in a rather lengthy period of weakness than in a crisis.
breakup will the euro zone, so Draghi, not. “There is therefore no Plan B.” Recently had awakened the old worries that the country could, in the case of a policy shift opt out of the currency union. The country is the end of January before elections.
The central bankers expressed understanding for concerns of savers who saw that the returns on their deposits shrank. The interest was for a long time “very, very low” – and that would “probably a time to come”
The difficulties that cause its crisis policy, the ECB chief are obviously very aware.. Politicians he did not want, Draghi admitted. In pointing out that his compatriot Giorgio Napolitano wants to resign shortly as president of Italy Draghi said his mandate as ECB chief would last until of 2019.
Source: n-tv.de
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