ECB seeks balance to keep recovery on rails

FRANKFURT AM MAIN: European Central Bank president Mario Draghi will paper over discord among colleagues at a press conference Thursday, analysts predict, with policymakers divided on their response to heftier economic growth

Top central bankers know the end is in sight for massive support

But the ECB’s governing council meeting in Frankfurt will bring another round in the battle over how quickly to wind down mass bond-buying and ultimately raise

are on alert for the slightest change in the bank’s stance, after minutes from December’s meeting showed governors plan to “revisit” policy

government and corporate bonds, offered cheap loans to banks and set interest rates at historic lows, aiming to stoke eurozone growth and boost inflation towards its

Like other central banks worldwide it has puzzled as higher economic growth—estimated at unemployment have not brought

short of the ECB target, and is seen

“While the strength of the economy suggests that extraordinary policy support is becoming unnec not seem to warrant policy tightening,” analyst Jennifer McKeown

No choice but to move

Some ECB chiefs argued at December’s meeting that “a policy stance - tion” was no longer needed, accord

Policymakers decided in October to cut bond-buying by half to

“We can be hopeful that the October extension was the last one,” ECB executive board member Benoit Coeure told German business

Council members in favor of a prolonged, gentle exit from bond- buying are fighting a rearguard action against more aggressive “hawks”, as the bank approaches technical limits to bond-buying

Bonds from less-indebted countries like Germany or the Baltic

That forces the ECB to buy more debt from countries such as France, Spain and Italy, departing from its commitment to buy in proportion to nations’ share of its capital, a study published Monday by Ger

Such constraints mean “the ECB is resigning itself to the inevitable” as it prepares to wind down bondbuying, Commerzbank economist

“It is compelled to focus on other monetary policy instruments” like interest rates in setting

The ECB insists that rates are not due an increase until “well after” - ible deadline that may not come

Inching retreat

For now, some analysts suggest Draghi could make his direction of travel clear by dropping an oftrepeated commitment to increase bond-buying “in terms of size or dura

- tive exit could jolt foreign exchange markets, sending the euro higher

That would make imports cheap

Over the coming months, the ECB will be hoping for signs that faster price growth may be on the way, such as eurozone workers negotiating hard for generous

German metalworkers could set the tone, as they press twin boost and the right to go part-time

Elsewhere unemployment remains high, limiting upward pres

“Wages are unlikely to pick up on a broad front” for now, with the short term, Commerzbank’s

the stronger economy will also lead foreseeable future” that will dispel