Draghi: the governments forward with reforms while the Ecb gives its support – The Sun 24 Hours

BERLIN. The president of the european central Bank, Mario Draghi, has once again urged european Governments to take advantage of the opportunity granted to it by the monetary policy of the Ecb to reform the economies of the Eurozone, which is suffering from a productivity growth too low and are likely to slow down further in the coming decades. The effect of the ageing of the population, said Draghi in a speech in Madrid, growth, lack of reforms, may be by 2050, lower than the 14% in Germany, 16% in Italy and 22% in Spain. In 1995, productivity in the euro area grew at about 2%, on par with the other major economic areas of the world, today, this growth is reduced to 0.5%, well below the United State s, other advanced economies and in emerging market Countries.

In an interview with the newspaper El Pais, Draghi has also underlined the risks for the Eurozone arising from the political uncertainty, although he declined to comment on the possible consequences of the constitutional referendum in Italy on Sunday.

Dragons: in the world of political uncertainty and significant economic

“The monetary policy – said Draghi in his speech of Madrid – is providing support and space for Governments to implement the necessary structural reforms. It’s up to them to act, individually at the national level and together at the european level”. In Germany, the choices of the Ecb are criticized as it is believed, among other things, that they remove the pressure to make reforms.

According to the president of the Ecb, instead, the low interest rates “tend to support instead of hinder the implementation of the reforms. We see this in some of the larger euro area Countries, which have recently achieved some important reforms of the labour market”. Draghi cites, among others, Italy and Spain. Reforms that reduce unemployment also have the effect, according to the central banker Italian, of reducing inequality.

Dragons prepares the extension of Qe beyond march. “We can’t let our guard down”

In the interview to El Pais Draghi argues that the rise of populism in Europe makes it more difficult to continue on the road to integration, and that the political uncertainty is one of the aspects of the “dominant” of the situation in the euro area. In the same interview, he mentioned that the growth, even if modest, is “robust” and inflation is improving. The data of inflation, widespread in the morning, shows an increase from 0.5 to 0.6%, but remains far from the Ecb target. In addition, the baseline data, adjusted prices for energy and food, remains nailed to 0.8%.

On the markets, it is therefore expected that at the meeting of 8 December, the council of the Ecb decides on a lengthening of the bond purchases, Qe, beyond the date of march 2017. In the interview to the Spanish newspaper, Draghi said that the council has never discussed the possibility of reducing the monetary stimulus.

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