Draghi mum on stimulus

European Central Bank chief delivers plea for maintaining trade liberalisation

WASHINGTON: European Central Bank chief Mario Draghi delivered a plea for maintaining trade liberalisation but acknowledged the widespread perception that lowered trade barriers had fueled inequality.

However, Draghi’s widely anticipated address to an annual gathering of global central bankers in Jackson Hole, Wyoming made no mention of when the ECB may wind down its multi-trillion-euro bond-buying stimulus program adopted in the wake of the 2008 financial crisis.

The decision not to discuss Europe’s “quantitative easing” policy saw the euro’s value spike against the dollar, with the European currency up nearly 2.5% against the greenback following the release of Draghi’s remarks.

Draghi said that without greater productivity growth the current recovery cycle would “converge downwards” to slower growth rates, according to prepared remarks. But he also warned against the threat of protectionism, which has risen as the developed world grows increasingly discontented with free trade.  

Published in The Express Tribune, August 27^th, 2017.

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