Daily Management Review

Draghi defends the ECB’s monetary policy


06/27/2017


Head of the European Central Bank (ECB), Mario Draghi, spoke in favor of incentive measures, saying that young people will benefit from the revival of growth in the euro area, reports Bloomberg.



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World Economic Forum
The soft monetary policy of the ECB helped to ease the problem of inequality in the region, which is "extremely destabilizing," Draghi said, speaking at the School of Economics and Management (ISEG) at the University of Lisbon.

"The main cause of inequality is unemployment," Head of the ECB said. "If politics is struggling with unemployment, it is also struggling with inequality."

Unemployment among young people "is declining, but it is still very high," Draghi added. "Young people who have found jobs thanks to our policy, I'm sure, do not object [to the ECB's strategy]", he said.

Draghi also appealed to those who criticize the ECB for low interest rates unprofitable for investors. According to him, the best solution for the regulator is to keep the incentives until it restores the price stability that is necessary for a healthy economy.

"Do not forget that the economy is contributing to the savings," Draghi said. "Interest rates should remain low so that the growth rate will recover."

Against the backdrop of the recovery of the euro area economy, some politicians insist that the ECB start planning to wind up the € 2.3 trillion bond buying program at the end of this year. Nevertheless, the Board of Governors of the ECB did not even discuss the strategy of folding QE at a meeting this month. At the same time, Draghi noted that many of the jobs created recently provided only temporary or part-time employment, and called for patience.

source: bloomberg.com






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