ECB President Draghi settles with the government in Rome
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The top Euro Guardian unusually overtly attacks the populist politics of his homeland. A claim is very important to him
MArio Draghi is often suspected in Germany of pursuing monetary policy in the interests of his compatriots. But the President of the European Central Bank (ECB) made clear on Thursday that the new populist government in Rome can not count on him. "The statements of Italian politicians have changed a lot in recent months and we are now waiting for facts," Draghi said coolly. A blatant reckoning with the many Volten, who particularly met the government in Rome since the change of power in June.
Politicians from the two government parties Lega Nord and the Five Star Party have repeatedly stressed in recent weeks that they are looking at the well-being of the Italians and not at the European bureaucrat. In particular, representatives of both parties have seriously debated the fact that they simply want to lift the three-percent rule on new debts. Even the idea to add 20 billion euros extra income to the household through an amnesty for tax evaders was astonishing in the rest of Europe. Rumors that the Finance Minister of Italy should have been several times before the resignation caused unrest.
Accordingly, the important president of the ECB, Draghi, went to court from Rome. "Words have done a lot of damage", he noted that the Italian diversity of ideas was scarce and pointed out that private households and businesses in particular would have to deal with such debates with rising interest rates. The only consolation from the point of view of the European Central Bank: so far there are no contagion effects in other countries.
In fact, in recent weeks only the yields of Italian government bonds have risen when uncertainty has spread to the financial markets. Also on Thursday, the yield on ten-year Italian government bonds rose to 2.85 percent. Sometimes the Italian bonds even increased to 3.25 percent in August.
The uncertainty about the future course in Rome is also reflected in the behavior of investors. An auction worth 7.8 billion euros of Italian government paper came to a relatively weak demand on Thursday.
Even in his opening statement, Draghi strengthened the tone and insisted on meeting the stability criteria – but without naming Italy by name. Literally speaking, the President of the ECB said: "The widespread upturn demands that financial buffers be replenished, which is particularly important for those countries where debt is high and for which compliance with the Stability and Growth Pact is essential for healthy Public finances. "The call for growth-friendly fiscal policy – which the government in Rome may have reinterpreted The pretext for costly economic stimulus programs was completely lacking in Draghi's statement.
Otherwise the press conference brought little news after the September meeting. The European Central Bank has slightly revised its growth forecasts for this year and next year. Turbulence in the emerging countries and protectionist tendencies blurred the outlook, he said. But not so strong that the monetary authorities would change their previous exit plan.
Draghi also promised to end net purchases on the bond markets by the end of the year, but, as in the past, left a back door open if the economy in the euro zone weakened again. "This shows once again how hesitant the ECB is, and more than ever I do not expect a real interest rate hike for the coming years," says Jörg Krämer, chief economist at Commerzbank, about the outcome of the Council meeting. The fact that the central bank did not decide on the exit of the bond purchases Thursday clearly shows how strongly they tend to ease monetary policy.
That is certainly a message that is welcomed in Rome.