The ECB reinforces its support for a euro less valiant

La BCE renforce son soutien à une zone euro moins vaillante

Photo: Emmanuel Dunand Agence France-Presse
“When you are in the black, you take small steps. You don’t run, but you move”, commented the president of the institution, Mario Draghi.

The european central Bank, reinforced on Thursday his support to the economy in the euro zone, taking by surprise the observers and painting a picture clearly clouded the outlook for growth and inflation.

“When you are in the black, you take small steps. You don’t run, but you move “, has commented to the press the president of the institution, Mario Draghi, to justify its unanimous decisions earlier than what was planned.

The ECB began by see 2020 as the time to raise interest rates at their historic low since march 2016, then she gave up to present “the summer of 2019” on the horizon. In addition, the institute of Frankfurt has launched a new wave of loans giants and cheap, to banks, between September and march 2021, each with a maturity of two years. The ECB thus intends to “preserve favourable credit conditions” and a “proper transmission of monetary policy” for the economy, that is to say the redistribution of the liquid assets in the form of credit to companies and households. “These measures are not, as such a huge surprise, but the timing of the east “, observed Carsten Brzeski, economist with ING Bank, for which the ECB seeks to avoid “any tightening brutal” in his speech.

The euro area is certainly not threatened as a whole of a recession, the risk remains ” low ” in the eyes of the central bankers, was hammered on Thursday, Mario Draghi. But, very dependent on trade, this economic region has suffered months of “risk” increasing from tensions and protectionist to geopolitical concerns, by way of the turmoil in some emerging countries. The ECB expects 1.1 % growth in 2019 in the euro zone and 1.6% in 2020. The monetary institution has also downgraded its inflation forecasts, giving implicitly his / her bet to bring, by 2021 the increase in prices at the level of “slightly less than 2 %” set by its mandate. Thus, and in spite of the good employment situation and wage growth, the ECB will not table more than the 1.2 % inflation this year and 1.5 % next year.