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The Socialist Party does not have an easy life in this fall. Invited RTL, one of his spokesmen, Juliette Méadel, had to defend the action of a government and a president at the lowest in the polls. And to do that, he had to resort to jargon. Or highly exaggerated
What she said.
“The ECB has decided to influence rates Directors: when we mobilized at the European level, it works! “
Why it’s more wrong?
According to M me Méadel, the “mobilization” of the Dutch government would have pushed Mario Draghi, head of the European Central Bank (ECB) to lower its key rates . This is, if not wrong, at least highly exaggerated.
1 . The ECB is independent
The interest rates of the ECB determined to summarize crudely, the cost of credit in the euro area. Mr. Draghi announced a further reduction in these rates now extremely low, at 0.05%, a record high
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This announcement comes as Inflation is at a very low level, and worries: it would be only 0.6% in the euro area, a few points of deflation, that is to say the lower prices. But can we say that this announcement follows the “mobilization” of the French rulers, or even European
On the one hand, the ECB is independent of political power, by its bylaws. It is sovereign over its decisions, and does not have to meet the demands of European leaders.
“neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies of the Union, the governments of the Member State or from any other body. Institutions and bodies of the Union and the Governments of the Member States undertake to respect this principle and not to seek to influence the members of the governing bodies of the ECB or national central banks in the performance of their missions. “
2 . The ECB requires states to pursue structural reforms
Next, and most importantly, Mr. Draghi is here in accordance with the primary mission of the ECB is to ensure price stability in Europe. The ECB has no mandate, unlike the Fed, to take care of the economy, but only “to maintain price stability .”
But the eurozone struggling to return to growth, which remains low (0.9% expected this year), and is on the brink of deflation. That is why Mr. Draghi takes, using the few tools at its disposal to support the economy and especially limit the risk of a deflationary spiral
Read our lighting. Why Deflation is not good news
This lower rates, combined with a policy of buying private debt (bank loans, to help banks restart lending) that also launches ECB “help return [inflation] closer to 2%” and serve “to provide credit to the real economy” , said the head of the ECB. It broke a taboo by explicitly acknowledging that it had also come to bring down the euro, which is not its mission in principle
Read. The ECB hits hard to revive the European economy
If the ECB made a strong move, see, as does the spokesperson of the PS, a sign that the ECB chief bowed to France and its application to spread or slow the austerity policies implemented since 2008 is at least exaggerated. Especially since Mr. Draghi said that “everyone should do his job”: “It will be very difficult to achieve the objective of keeping inflation close to 2% on the basis of monetary policy, we must growth, [...] fiscal policy requires foremost structural reforms. “ And so the pursuit of debt reduction policy conducted including France -. Whom he also ” bliss “
In fact, Paris n does not have the power to obtain only a shift of European policies for economic recovery. The ECB also not in a mandate. That would be the European Commission or the European Council to take, if any, of such decisions. And, as we know, Germany Angela Merkel is still not convinced of the need to change policy.
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