Deja vu for the EU as central bank tries to avoid recession
In astonishing outburst, he warns Premier MUST comply with No Deal law
PRESSURE is growing on the EU to hammer out a Brexit deal after the region’s central bank launched a series of measures to boost flagging eurozone economies.
The European Central Bank (ECB) yesterday restarted quantitative easing – the system where money is pumped into the financial system to stimulate growth.
Signs that the region’s economies are faltering will ramp up pressure on the EU’s chief Brexit negotiator, Michel Barnier, to agree a trade deal between the EU and the UK.
The outgoing president of the ECB, Mario Draghi, blamed Brexit uncertainties and the continuing trade war between the US and China for battering the eurozone.
Mr Draghi, 72, who is stepping down at the end of October to make way for Christine Lagarde, conceded that the eurozone was facing ‘more protracted weakness’ than previously expected. He added the region was suffering from the ‘prevailing weakness of international trade in an environment of prolonged global uncertainties’.
Germany, the eurozone’s biggest economy, is teetering on the brink of recession.
Widely respected think-tank the Ifo Institute believes the German economy has contracted again in the third quarter of this year, as demand for manufactured items like cars has slumped, meaning it will have entered a technical recession.
The downgrades for the eurozone came as Mr Draghi was forced to launch a raft of measures designed to prevent the region from grinding to a halt.
The ECB has cut a key interest rate for banks who park their money with it, from minus 0.4 per cent to minus
‘Thrown the kitchen sink at it’
0.5 per cent. This rate has been negative since 2014 – meaning that rather than gaining interest, banks are being charged to keep their money with the ECB.
The hope is that this will encourage them to lend to consumers and businesses, boosting spending and helping the economy, rather than squirreling their money away with the ECB.
The central bank will resume its programme of printing money to buy up bonds, at a rate of £19billion per month, in an effort to inject more money back into the economy.
The ECB’s decisions drew a swift reaction from Donald Trump, who tweeted that the ECB was ‘trying, and succeeding, in depreciating the euro against the VERY strong dollar’. Andrew Mulliner, of investment firm Janus Henderson, said: ‘The ECB has thrown the kitchen sink at the eurozone economy once again, and we will have to see it if works.’
The measures cast a cloud over Mr Draghi’s eight years at the top of the ECB. In 2012, he promised to preserve the euro ‘whatever it takes’ – a pledge widely created with saving the bloc as it reeled from crisis.
He now expects the eurozone’s economy to grow 1.1 per cent this year and 1.2 per cent in 2020 – down from June’s forecasts of 1.2 per cent and 1.4 per cent respectively.
Meanwhile official data from the UK showed the economy grew by 0.3 per cent in July – more than experts had predicted, and a bounce-back from a contraction in the previous three months.
JOHN Bercow delivered an extraordinary warning to Boris Johnson over Brexit last night, telling him not to disobey the new anti-No Deal law.
The outgoing Commons Speaker suggested that breaking the law just passed by MPs would be like robbing a bank.
And he warned that Britain would not leave the EU without Parliament’s approval, threatening extra ‘procedural creativity’ at Westminster if necessary to thwart any attempt
Mr Bercow also called for Britain to have a written constitution to prevent the Government ‘perverting’ the law.
The comments – which come after he allowed backbenchers to take control of Parliamentary time to pass a law ruling
‘The most terrible example’
out a No Deal Brexit on October 31 – are likely to enrage Tory MPs. Mr Bercow has faced repeated accusations of anti-Brexit bias and has angered the Tories to the extent that they vowed to break convention and stand a rival Tory candidate in his Buckingham seat at the next election.
Mr Johnson has repeatedly vowed to deliver Brexit on October 31 and has said he would rather be ‘ dead in a ditch’ than ask for an extension to Britain’s EU departure date. It has been suggested that he might try to wriggle out of the new law or find a way to fight it or even sabotage the request for an extension.
In his speech last night at the Bingham Centre, part of a legal institute in London, Mr Bercow said it was ‘astonishing’ that anyone even entertained the idea that the Prime Minister could disobey the law.
He said that the effect of the new law passed by MPs meant that the only possible Brexit outcome was one approved by Parliament. On the prospect of the PM refusing to request an extension, he said: ‘Not obeying the law must surely be a non-starter. It is astonishing that anyone has even entertained it.
‘It would be the most terrible example to set to the rest of society. One should no more refuse to request an extension of Article 50, because of what one might regard as the noble end of departing from the EU as soon as possible, than one could excuse robbing a bank on the basis that the cash stolen would be donated to a charitable cause immediately afterwards.’
Mr Bercow added that if Mr Johnson did consider such a course of action, then MPs would act again – and that ‘procedural creativity’ may be required. He said: ‘We should not be in this linguistic territory. If we come close to being there, I would imagine that Parliament would want to cut such a possibility off and do so forcefully.
‘If that demands additional procedural creativity to come to pass, it is a racing certainty that this will happen and that neither the limitations of the rulebook nor the ticking of the clock will stop it doing so.
‘If I have been remotely ambiguous so far, let me make myself crystal clear: the only form of Brexit which we will have, whenever that might be, will be a Brexit that the House of Commons has explicitly endorsed.’
In a self-aggrandising speech, Mr Bercow said Parliament had undergone a ‘renaissance’ in the past decade since he took the chair. He said his reforms that have allowed backbenchers to hold the Government to account had changed Parliament for the better.
But his comments angered Tory MPs. Brexiteer Michael Fabricant said: ‘If Bercow thinks he can break the rules in order to thwart the will of the people in the referendum, I say, “Boris, do whatever you need to do to be the people’s PM.”’ His colleague James Duddridge added: ‘I welcome him resigning. Even if he exceeded his nine-year election pledge.’ On Monday, Mr Bercow announced that he would step down on October 31 – even if no Brexit deal had been agreed. Opposition MPs paid tribute to him for 90 minutes, while Labour leader Jeremy Corbyn shook his hand.
It came after the Tories said they would put up a rival Tory candidate in his Buckingham seat at the next election. By convention, parties do not stand candidates against the speaker.
Mr Bercow originally said that he would serve a nine-year term, but changed his mind after the 2017 snap election and vowed to stay on to see Brexit through.