ECB should continue to support economy, euro zone: Draghi – The Economist

The president of the European Central Bank, Mario Draghi, said the financial institution should continue to support the euro zone economy with its monetary policy ultra-expansive, on the eve to decide how to extend its program of monthly purchase of bonds.

The European Central Bank needs to continue to support the euro zone economy with its monetary policy ultra blast, they said on Monday, two prominent officials of the agency, cementing expectations of an extension of the bond purchase programme next month.

The ECB will decide on December 8 if it spreads and how it does it, its program of monthly purchase of bonds by 80,000 million euros (85,000 million dollars). Sources have told Reuters that it is not certain that the scheme will continue beyond its current deadline of march.

the president of The ECB, Mario Draghi, said to a committee of the European Parliament that the ECB needs to maintain its current level of monetary support to carry inflation toward its target of nearly 2 percent.

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“The return of inflation towards our objective still depends on the continuation of the current and unprecedented level of monetary support, despite the gradual closing of the gap of the product,” said Draghi at the European Parliament.

inflation in the euro zone rose 0.5% in October and is expected to advance by about 1% at the beginning of next year, mainly due to the stabilization of oil prices.

NOTICE: ECB must reduce purchases of debt

Speaking in Munich, in the meantime, the Executive Council member Benoit Coeure said that the time to begin to reduce the extraordinary support money “had not” arrived and that the ECB needs first to see a sustained pickup in inflation.

measurements based on expectations of inflation have risen in the past two months and particularly since that Donald Trump won the presidential elections in the united States, which increased the stakes of investors on a higher fiscal spending in the world’s largest economy.

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But Draghi warned that we should look beyond the market reaction to the victory of Trump, which will have long-term consequences that are difficult to predict.

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