ECB’s Draghi says substantial monetary accommodation needed
Despite growing impatience with the ECB’s ultra-loose policies, the ECB president is not ready to make changes
At a speech at The Hague, European Central Bank President Mario Draghi stuck with his go-to refrain that the ECB’s massive stimulus must continue, reports Daily FX.
“Maintaining the current very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium term.”
The comments come despite a continued economic recovery in Europe, and concerns of member countries, such as the Netherlands, which is facing declining savings rates and an inflating housing bubble.
The statement is sure to increase the tension between Draghi’s camp and those supporting tighter policies such as German central bank president Jens Weidmann. Weidmann said recently that the ECB needs to tighten policy as German headline inflation hit 2%. He says the higher rates are also necessary to strengthen the euro in order to avoid growing trade tensions with the US.