Tuesday 17 October 2017

Ukraine threatens Europe's recovery - Draghi

Mario Draghi
Mario Draghi
ECB chief Mario Draghi

Jeff BlackAlessandro Speciale

The president of the European Central Bank (ECB), Mario Draghi, said the risks to Europe's recovery from conflicts including the Ukraine are increasing.

"Heightened geopolitical risks, as well as developments in emerging-market economies and global financial markets, may have the potential to affect economic conditions negatively," Mr Draghi, pictured above, said in Frankfurt after the ECB kept its main interest rates unchanged. "We are strongly determined to safeguard the firm anchoring of inflation expectations over the medium to long term," he said.

Stand-off

Headwinds facing the recovery in the 18-nation euro area are intensifying after Italy slipped back into recession and the stand-off between Russia and the US and its allies escalated into the worst such conflict since the Cold War.

Mr Draghi has said in the past that an external shock to the economy that endangers the inflation outlook could be a trigger for broad-based asset purchases or quantitative easing.

"The governing council is unanimous in its commitment to use unconventional policy measures like ABS purchases, like QE, if our medium-term outlook for inflation were to change," Mr Draghi said. "We will closely monitor the possible repercussions of heightened geopolitical risks and exchange-rate developments."

Irish Independent

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