Merkel unhappy with Draghi’s apparent new fiscal focus
A German news magazine reported on Sunday that Chancellor Angela Merkel is unhappy with European Central Bank chief Mario Draghi for apparently proposing a greater emphasis on fiscal stimulus over austerity in order to boost growth in Europe.
Draghi told a conference of central bankers that it would be “helpful for the overall stance of policy” if fiscal policy could play a greater role alongside the ECB’s monetary policy.
Der Spiegel said Draghi had defended his Jackson Hole speech, which was interpreted as meaning that the ECB, having cut interest rates to record lows and injected money into the economy to support a recovery, was now looking at fiscal stimulus as a way of fomenting growth and facilitating reform.
“The ECB has a clear mandate to ensure currency stability. It doesn’t have a mandate to finance states,” the minister told reporters on Sunday.
Source: reuters
