DRAGHI: “ECB, PREMATURE TO TALK ABOUT EXIT STRATEGY”. STILL RATES, "MODERATE" RECOVERY. AND THE BAG GOES DOWN
"The economy still suffers downside risks." He claims it the president of the ECB Mario Draghi at the end of the board according to which "signs of stabilization" are confirmed. In fact, he adds, 'The ECB expects a moderate recovery for 2012'. Furthermore, according to the central banker, "bank financing (funding) has generally improved" and it can be expected that, over time, the current trend of "stabilization of financial market conditions" will increase.
No rate cuts, therefore, already at the minimum. Or other anti-recession support measures, despite the fact that the general picture is clearly deteriorating almost everywhere, including Germany itself. Not to mention Italy, in full recession. And so Piazza Affari worsens after the words of the president of the ECB. The Ftse Mib dropped 1,28% to 15.427 points. But there is no room for intervention, also because, despite the economic situation, inflation in Europe will remain above 2% for the whole year, mainly due to the tensions triggered by the high price of oil.
Mario Draghi, however, had to resist the pressure from the Bundesbank which, on the contrary, makes no secret of wanting to close the chapter of a policy deemed too permissive as soon as possible. Paradoxically, the news arrived in the morning of the unfortunate outcome of the auction of Spanish government bonds, subscribed for 2,73 billion against a target of 3,5 billion: in the face of the emergency in Southern Europe (even Italian BTPs suffer from the scarcity of international buyers) the ECB has not listened to Jens Weidman, in favor of a tightening. It is "highly premature", therefore, to discuss the 'exit strategy' of the extraordinary measures launched by the central bank in recent months, as requested by the German members of the board of the Frankfurt institute.
After all, there is a common consideration to bring hawks and doves together: the margins of monetary policy are narrow and in any case insufficient to bring economies stressed by a crisis back on track which requires far more interventions. Once again Draghi launches his appeal to the politicians of the Old Continent. Governments, says the president, in addition to "restoring the accounts, must implement strong structural reforms" in order to restore confidence and "sustainable growth" . Among these, the new labor discipline stands out. "The flexibility and competitiveness of the labor market" are "crucial" for the functioning of the euro area, recalled the president of the ECB Mario Draghi, underlining how, in wage agreements, "it is important to take productivity into account".
