Friday 24 October 2014

Mario Draghi gently puts IMF's Christine Lagarde in her place

ECB chief says "thanks, but no thanks" to her "generous suggestions" on the eurozone

Published 03/04/2014 | 20:33

Mario Draghi, President of the European Central Bank,

Mario Draghi, the European Central Bank President, gently chided IMF managing director Christine Lagarde for calling for a rate cut the day before the central bank's monthly policy meeting.

Speaking at a press conference following the ECB's decision to again hold rates at all-time lows on Thursday, Mr Draghi said: "The IMF has been of recent extremely generous in its suggestions on what we should do or not do, and we are really thankful for that."

The IMF chief said on Wednesday evening that it was "necessary" for the ECB to cut interest rates further to ward off the spectre of deflation in the euro area.

Mr Draghi pointed out that the IMF did not make a habit of telling the US Federal Reserve what to do.

"Frankly, I would like the IMF to be as generous as they have been towards us also with other monetary policy jurisdictions, like for example issuing statements just the day before a (Fed) meeting would take place."

The ECB's governing council held its key interest rates unchanged for the fifth month in a row, despite an unexpected slowdown in area-wide inflation and worries about deflation – the destructive spiral of falling prices in which consumers put off purchases, thus destroying salaries, jobs and investment.

ECB officials reject suggestions that the euro area is in danger of slipping into deflation.

The EU statistics agency Eurostat put area-wide inflation at just 0.5pc in March, down from 0.8pc in February, way below the ECB's target of just under 2pc.

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