ECB president Mario Draghi warned about the weakness of the internal economy and called member states to implement reforms
by Emanuele Bonini
Economic crisis is not over yet, said the president of the European Central Bank, Mario Draghi, during the economic dialogue in the European Parliament. At the moment there's no reason to be optimistic. Or, well, there was too much optimism during the past month. «The economic recovery in the Euro area is losing momentum», warned the ECB chief. «Following some moderate expansion in recent quarters, growth of the Euro area real GDP came to a halt in the second quarter of this year». In fact «the early information on economic conditions which we received over the summer has been somewhat weaker than expected». As Draghi explained, «while industrial production and manufacturing orders in July gave some reason for optimism, more recent survey indicators have given no indication that the sharp decline registered in August has stopped». At the same time «unacceptably high» unemployment and «continued weak» credit growth are likely to curb the strength of the recovery, pointed out Draghi during his intervention. To make the situation more difficult there are also the international framework and the inaction of member states of the Euro area. In Draghi's opinion «heightened geopolitical tensions could dampen business and consumer confidence», while on the other hand «risks of insufficient structural reforms could weigh on the business environment».
The Eurotower thus called national governments to undertake «courageous structural reforms» together with «improvements in the competitiveness of the corporate sector», considered as «key» to improving business environment. «Structural reforms - recalled Draghi - crucially complement the ECB accommodative monetary policy stance and further empower the effective transmission of monetary policy». As indicated by the same Draghi at several occasions and reiterated once more in Brussels, «no monetary – and also no fiscal – stimulus can ever have a meaningful effect without such structural reforms». The ECB «has done a lot over the past three years to safeguard price stability», remarked the Italian chief of the Eurotower. He reminded the institution he's leading fought the confidence crisis in the Euro that raised interest rates, provided the Euro area banking system with «unprecedented» funding, and continuously lowered our policy rates. Now it's time for countries to fulfil with their responsibilities.
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| Mario Draghi |
Economic crisis is not over yet, said the president of the European Central Bank, Mario Draghi, during the economic dialogue in the European Parliament. At the moment there's no reason to be optimistic. Or, well, there was too much optimism during the past month. «The economic recovery in the Euro area is losing momentum», warned the ECB chief. «Following some moderate expansion in recent quarters, growth of the Euro area real GDP came to a halt in the second quarter of this year». In fact «the early information on economic conditions which we received over the summer has been somewhat weaker than expected». As Draghi explained, «while industrial production and manufacturing orders in July gave some reason for optimism, more recent survey indicators have given no indication that the sharp decline registered in August has stopped». At the same time «unacceptably high» unemployment and «continued weak» credit growth are likely to curb the strength of the recovery, pointed out Draghi during his intervention. To make the situation more difficult there are also the international framework and the inaction of member states of the Euro area. In Draghi's opinion «heightened geopolitical tensions could dampen business and consumer confidence», while on the other hand «risks of insufficient structural reforms could weigh on the business environment».
The Eurotower thus called national governments to undertake «courageous structural reforms» together with «improvements in the competitiveness of the corporate sector», considered as «key» to improving business environment. «Structural reforms - recalled Draghi - crucially complement the ECB accommodative monetary policy stance and further empower the effective transmission of monetary policy». As indicated by the same Draghi at several occasions and reiterated once more in Brussels, «no monetary – and also no fiscal – stimulus can ever have a meaningful effect without such structural reforms». The ECB «has done a lot over the past three years to safeguard price stability», remarked the Italian chief of the Eurotower. He reminded the institution he's leading fought the confidence crisis in the Euro that raised interest rates, provided the Euro area banking system with «unprecedented» funding, and continuously lowered our policy rates. Now it's time for countries to fulfil with their responsibilities.
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