Friday, April 22, 2016

ECB Policy Drawing Fire #NIRP #ZIRP

While Draghi left the door open to future rates cuts, will he be allowed to implement them. Emergency rate cuts "promised" by the ECB's president Jean-Claude Trichet were blocked by the bank's governing council in early April. This move, a trend rising from growing skepticism towards EU policy in Germany, defied mounting pressure from EU politicians to respond to an economic contraction spreading throughout Europe economies. The refusal to act prompted a furious protest from business groups across the eurozone. "It seems like Europe is interested only in holding up the walls of the house, without noticing that inside flames have already reached the second floor," said Italy's Confindustria.

As the number of central banks openly questioning the soundness of negative interest rate policy (NIRP) rises, it likely Draghi, Brussels, and connected interests will work even harder to promote and expand the status quo of the structurally flawed Euro.

Headline: ECB Leaves Door Open for Further Interest-Rate Cuts

FRANKFURT—The European Central Bank left its policy mix unchanged on Thursday, but ECB President Mario Draghi reopened the door to fresh interest-rate cuts and launched a counterattack against the bank’s German critics, who he warned could delay a return to higher growth.

“We have a mandate for the whole eurozone, not just Germany,” Mr. Draghi said after the ECB’s policy meeting. “We obey the law, not politicians. We are independent.”



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