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You are here: Home / Euro / Draghi declares no rush for policy change

Draghi declares no rush for policy change

March 15, 2018 by Ben Fletcher

Draghi declares no rush for policy change

Mario Draghi, in the last few weeks has gone from saying he expected the Quantitative Easing program to stop shortly, to yesterday suggesting that he is in no rush to make changes. Investors were getting ready for some Euro strength later this year following continuous positive economic performance in the last year. However, the President of the European Central Bank has called for patience from the markets as the recovery is still fragile.

There is a changing landscape coming this year with Brexit and a trade war on the cards with the United States. Any changes that the Central Bank make at the moment would need to be able to hold up to any uncertainty in the near future. With all things considered it could be sometime before any major changes in Eurozone monetary policy take place.

This could once again cause a rift in the balance of the EU member states, the northern, wealthier countries want changes now and the southern states still need their economies to be supported.

Considering the elections that have taken place in Europe and the increased popularity of right wing parties, the European Union may need to be careful how they tread. If there was to be more pressure put on Italy then the calls for a referendum on the EU could become increasingly louder.

Once the UK leaves the EU next year there will be major hole in the single states coffers and replacing the lost funds will be critical. However, at the moment it doesn’t look obvious where that money is going to come from and it seems unlikely many nations will be willing to offer more. Germany nearly saw a change in Government this year off the back of further contributions and if they’re expected to pay more, then dissent may become a far more common problem.

Filed Under: Euro Tagged With: Brexit, Brexit negotiations, ECB, Euro strength, Euro weakness, Eurozone economy, Mario Draghi, Quantitative Easing (QE)

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