Draghi Keeps Rates on Hold in Face of German Backlash
But ECB’s Draghi pledges loose policy ‘as long as needed’
Ger man F i n a n c e Mini s t e r Wolfgang Schaeuble sharply attacked ECB policies, arguing they were causing “extraordinary” problems for Germany and were in part to blame for the rise of the right-wing anti-immigration Alternative for Germany (AfD).
Draghi repeatedly stressed that inflation remained far off the bank’s target of near two percent and argued that the euro zone economy still faced a cocktail of e xt e r nal r i s ks and would be in a worse state today had the ECB not resorted to negative interest rates to accompany a 1.7 trillion euro ($1.92 billion) money-printing scheme.
“Our policies work, they are effective. Just give them time to fully display their effects,” he said. “Global uncertainties persist. Looking forward, it is essential to preserve an appropriate degree of monetary accommodation as long as needed.” He said the bank would begin buying corporate bonds as part of its quantitative easing policy in June.
ECB to begin buying corporate bonds as part of its quantitative easing policy in June