Business

Sunday 22 July 2018

Trade war fears won't save QE - Draghi

ECB President Mario Draghi. Photo: REUTERS
ECB President Mario Draghi. Photo: REUTERS

Piotr Skolimowski and Alexander Weber

President Mario Draghi said the improvement in euro-area inflation is on a self-sustained path, allowing the European Central Bank (ECB) to withdraw its bond-buying despite the rising spectre of a global trade war.

Echoing the recent language from the ECB, Mr Draghi said the main risks relate to the "threat of increased protectionism". He said that "in times of heightened global uncertainty, it is more important than ever that Europe stands together", reiterating his push for governments to do more to strengthen the region's structures.

"Our confidence in the inflation path is also rising," the ECB president told the European Parliament yesterday.

"While uncertainties related to global factors, including the threat of increased protectionism, have become more prominent, the risks surrounding the euro area growth outlook remain broadly balanced."

The comments come days after the US slapped tariffs on billions of dollars of imports from China, which retaliated immediately. Meanwhile, French Economy Minister Bruno Le Maire said at the weekend that Europe also won't shy away from retaliation.

Executive Board member Benoit Coeure said in a Bloomberg TV interview over the weekend that the ECB is alert to risks from trade tensions that are rapidly escalating, but its current monetary-policy stance is working well. (Bloomberg)

Irish Independent

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