Business World

Sunday 20 October 2019

Draghi urges help to kickstart growth

ECB president Mario Draghi
ECB president Mario Draghi

Piotr Skolimowski

European Central Bank president Mario Draghi believes the institution can do more if needed to boost inflation, and has repeated his call for euro-area governments to support this effort with fiscal spending.

"All instruments, from interest rates to asset purchases, to forward guidance, are ready to be calibrated," he told the 'Financial Times'. As he nears the end of his tenure at the ECB, Mr Draghi repeated his view that more government spending "could greatly help" the central bank's mission.

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He warned the current loose stimulus "may have to last a long time if there is no support from fiscal policy", and will be less effective unless governments loosen purse strings.

His comments will probably irk countries such as Germany which have traditionally rejected talk of loosening government budgets. The ECB's most recent policy meeting sparked a revolt from officials upset over Mr Draghi's plan to reactivate quantitative easing, with central bank governors from countries including Germany, France and the Netherlands opposing the measure.

Executive board member Sabine Lautenschlaeger quit last week, more than two years before the end of her term.

Bloomberg

Irish Independent

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