The president of the european central Bank, Mario Draghi, in Brussels on 6 February 2017 ( AFP / JOHN THYS )
“The support of our measures of monetary policy is still needed” to boost activity and prices in the euro zone, said Mr. Draghi before the Committee on economic and monetary affairs of the european Parliament.
The risks for the euro area continue to persist and are “mainly related to factors in the world”, has justified the central banker.
After an increase of 1.1% in December, consumer prices in the euro zone rose 1.8% year on year in January, very close to the objective of the central bank of an inflation slightly below 2%, a synonym according to the stability of prices.
But “our monetary policy strategy prescribes that we should not react to individual statistics and increases short-term inflation. The horizon relevant to our policy is the medium term”, pointed to Mr. Draghi.
According to him, the acceleration of inflation in December and January, “reflects the base effects and the recent increase in energy prices”. Without taking account of the prices of energy and food, inflation remains very low, he argues.
The central bank is struggling since more than two years to boost the economy and prices. In addition to rates at the lowest and loans giant free to the banks, it buys in mass every month debts public and private in the framework of its program dubbed “QE”.
The recent acceleration of inflation increases the pressure on the central bank, while more and more observers, particularly in Germany, are worried about the risk of the policy is very interventionist conducted by the ECB and the call to reduce sail in the face of rising prices.
The central bank has also been a target during the weekend by German Finance minister, Wolfgang Schäuble, after a senior advisor to the us president, Donald Trump, has accused Berlin of “exploit” its business partners with a euro that would be “grossly undervalued”.
“When Mr. Draghi has embarked on an expansive monetary policy, I told him that he was going to pull the trade surplus the German to the top (…) I don’t want to be criticized for the consequences of this policy,” said Mr Schäuble in an interview with the German daily Tagesspiegel.
According to him, the monetary policy of the ECB “is too accommodative for Germany” and the exchange rate of the euro “too low for the competitiveness of the German economy”.
“We are not manipulators of money,” replied Mr Draghi in the face of the members of the european parliament, defending himself from wanting to bring down the level of the euro to the benefit of a particular country.
According to him, Germany is not the only euro zone country to record economic success. Other countries, such as Ireland or the netherlands, have made progress in recent years, and “they did it because they have conducted structural reforms, strengthened their economy and made it more flexible,” noted the head of the ECB.
The central banker has also ensured that his institution was still ready to act further in the event of a deterioration in the outlook for growth and inflation in the euro zone.
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