The data of the last few weeks “confirm that the cyclical recovery of the euro area is becoming increasingly solid and that the downside risks have diminished again”. However, "a very substantial degree of monetary accommodation remains needed” to favor the rise of inflation. This is the message launched today by the president of the ECB, Mario Draghi, in the press conference after the Governing Council meeting that this morning confirmed the monetary policy of the Eurotower. Immediately after these words, the euro shot up to 1,093 dollars.
"It is true that growth is strengthening and we are confident that it will continue to accelerate and spread – continued Draghi – Today growth is solid and widely distributed, but if the prospects become less favorable or inconsistent with the required inflation adjustment, we would be ready to increase quantitative easing”.
The number one of the European Central Bank has specified that this can mean extend the securities purchase programme beyond the scheduled deadline (December 2017) or increase the monthly amount again, which has been reduced to 60 billion euros since April (previously it was 80).
Before thinking about a normalization of monetary policy, inflation must be at the level desired by the ECB, close to but below 2%,"for the entire Eurozone and not for just one country“, said the ECB president, referring to the large gap in price trends between countries such as Germany and others. Draghi explained that inflation should show a "lasting" convergence towards the desired level and "stay on its own two feet".
Draghi then revealed that in the Governing Council of the ECB there was "a discussion on the balance of risks to growth: some members have a more optimistic view of the economic situation and others, while acknowledging that there has been an improvement, believe that this does not justify any change in communication”. But despite this there was "unanimity" in establishing the terms of the communication on assessments of the economic outlook.
As for the ballot for the French presidential elections between the pro-European Emauel Macron and the euro-sceptic Marine Le Pen, the President of the ECB naturally avoided committing himself: "We don't conduct monetary policy on the basis of electoral results," he said.
