The ECB torn between low inflation and German grumbling – L’Express

The board of the institution’s governors held in the morning its regular monetary policy meeting, as always followed a press conference of President Mario Draghi, from 12:30 GMT.

“ Any new measures would also be surprising that a victory for Albania ” to the Euro-2016 soccer predicts Carsten Brzeski, economist at ING. “ However, given the recent war of words led by Germany against the ECB press conference should be anything but boring ,” said the economist.

“ must expect some action but weighty words ,” he adds.

The press conference will be the first public appearance of Mr. Draghi after a recent wave of criticism from Germany, where its low interest rate policy and abundant liquidity is accused of robbing savers and put banks at risk.

The influential German Minister Wolfgang Schaeuble was illustrated with a particularly virulent pique against the ECB, accusing him of fostering the rise of populist movements.

His colleague Economy Sigmar Gabriel on Wednesday handed a layer: “ Do not see the policy of the ECB the heart of the problem, but do not more help judge and criticize the policy of the ECB , “said he said.

– ‘main problem’ –

“ Germany is currently the main problem of the ECB “, told AFP a source close to the central bank.

“ Apparently Schäuble and Draghi have smoothed things during the IMF meeting last week, but the media interest in this conflict will persist ,” predicted Mr. Brzeski, for which “ the war of words will continue .”

The central bank, thwarted for months by a desperately low inflation, has promised to continue its highly expansionary policy for several years.

Penalised by the inexorable decline in oil prices were flat in March, after falling 0.2% in February, where the central bank is a “ near inflation but less than 2% “.

In this situation, the European monetary institution was forced to expand its action twice in the last five months.

In early March, it lowered all its policy rates at historically low levels, unveiled a new program of free giant loans to banks (TLTRO) and expanded the “ EQ “, its extensive program of public and private debt buybacks, saying even willing to buy corporate debt, even unprecedented operation.

– Disillusion -.

“ At present, the ECB is still largely focused on the implementation of the various measures already announced C is the case of corporate bonds purchase program to which many important details are still missing , “said Marco Valli, an analyst at UniCredit.

Mr. Draghi will therefore mission to clarify the gray areas and to work on educational measures, whose effectiveness continues to be debated.

“ The first assessment of the measures decided by the ECB in March rather disillusioned: the + confidence shock + that the central bank had expected did not materialize ,” says Michael Schubert of Commerzbank.

“ more harsh disappointment, the more likely that the central bank to take further measures. She’ll probably opt for the same instruments that so far, which may not significantly improve confidence “, he considers.

Mario Draghi will also be questioned about the recent rise of the euro against the dollar, which could undermine the competitiveness of European exporters.