European Central Banks president Mario Draghi is set to face German legislators on Wednesday. The head of ECB easily averted questions from members of the European parliament before heading to face critics.
Draghi has been asked to speak the Bundestag, a German parliament filled with the most savage critics of his policy to spark the Eurozone’s growth with negative interest rates and a downpour of cheap money. The event will be his first appearance there in almost four years.
However, he got a taste of the interrogation that he can expect in Berlin as early as Monday, when he gave a testimony at a hearing of the European Parliament’s Economics and Monetary Affairs Committee in Brussels.
“People don’t like your policies, and you are ignoring this, although you say you find these discussions fruitful,” one MEP told Draghi during his once-a-quarter appearance before the Parliament.
Draghi smoothly turned the tables on the politicians for the economic issues that the Eurozone is still facing, with his own well-prepared response.
“We have reasons to believe our policies are effective, it’s actually never worked better, and changes have passed to the real economy,” said. “Monetary policy alone is not enough to reboot economic growth in the long term. It is our job to study the interaction between monetary policy and structural reforms, although we don’t suggest any specific ones.”
In the previous months, German lawmakers have criticized Draghi and the European Central Bank for everything from the lower pension benefits to an abrupt increase of the far-right and anti-euro Alternative for Germany party, all along keeping a close eye on the nation’s own spending that can help boost the German and the Eurozone economy.
Finance Minister Wolfgang Schäuble’s remarks don’t seem like a good indication for Draghi on Wednesday, as he may have to discuss what he intends to do when the ECB’s quantitative easing policy ends in March 2017. Most analysts expect him to declare an extension of the due date as early as next month, with the Eurozone’s sluggish growth and the ongoing uncertainty arising from the Britain’s vote to leave the European Union.
“One should ask what would have happened if we didn’t have an expansionary monetary policy,” Draghi told MEPs. He also pressed national governments with more fiscal authority to utilize their surpluses to increase growth and lower unemployment rates. Otherwise, the Eurozone economy will continue declining and the ECB will attempt to restore it by lowering the rates further.
Draghi said during his speech that “Eurozone is continuing an economic recovery at a moderate and steady pace, but lower than envisaged in June due to a lower foreign demand outlook.” The official estimates of the ECB show an increase in the coming years, hitting 1.6 percent in 2018.
Draghi: UK Gets No Favors In Brexit Deal
ECB president Draghi said that the United Kingdom should not be given any special favors on single-market access during talks over its exit from the European Union.
“Any outcome should ensure that all participants are subject to the same rules,” he told European Parliament lawmakers on Monday. “It is very hard to imagine that any agreement that will be perceived as discriminatory against some subjects or in favor of other subjects could be a source of stability for the future of our EU.”
Since the Brexit vote on June 23, the UK government has been looking to work out whether it can keep access to the single market without agreeing to all of its conditions.
The ECB chief said that while the central bank doesn’t have any official role in the Brexit deal, it could serve as an adviser.