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Mario Draghi staged the beginning of the end of the ECB's monetary stimulus

Maintains types and asset purchase program, but removes the reference to elevate the latter if conditions worsen

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Mario Draghi staged the beginning of the end of the ECB's monetary stimulus

The political tendencies that dominated second half of twentieth century are reversed. Where re was financial regulation to avoid excesses such as those that gave rise to Great Depression re is now deregulation, despite great Crisis. Faced with bipartisanship of left and dominant centre for decades today emerges low-intensity extremisms badly baptized as populism. If globalization multiplied trade flows since World War II under influence of US, Washington today sponsors a conato of trade war against its allies. Worried about Italy — where populism adds more than 50% of vote — Draghi bit his tongue politically, but he uttered a serious warning: "The greatest risks to economy are today protectionism and financial deregulation."

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"If tariffs are imposed on Allies, I wonder who enemies are today," he ironed, and n emphasize that he does not foresee a "big impact" on measures that America prepares. "The seriousness would be an escalation affecting global confidence," he said.

The manipulation of dollar's exchange rate is great headache of Draghi, which in recent weeks has repeatedly loaded against United States. Because in Europe waters fall more calm than usual. The ECB is at a waiting impasse. The eurozone grows and recovery is coming to employment, but inflation does not end up and Draghi does not want to rush into withdrawal of stimuli. So yesterday he played tie. To 0-0, in purest catenaccio style: He threw a few crumbs at Hawks — supporters of greater orthodoxy — and withdrew from traditional communiqué after ECB meetings possibility of increasing asset purchases if things were twisted. But nothing has changed: ECB will continue to buy 30 billion euros a month at least until September 2018, and interest rate hikes will not come well into 2019.

Avoid Overjumps

Still, Draghi was forced to signal exit of purchase of assets, in a decision that was taken unanimously. It's about guiding markets to avoid shocks, that's all. Moreover, life remains same: "Recovery is based despite global risks that include protectionism and volatility in currency markets," said Italian, "but eurozone still needs a broad level of monetary stimulus." Draghi's mantra remains "trust, patience, and persistence." But that subtle change of tone — eliminating possibility of re-increasing size of QE — shows that pendulum moves slowly towards withdrawal of stimuli.

That if nothing is twisted, because Draghi has fly behind ear. The ECB charged in December against statements of interest in Washington in favor of a weak dollar, which is strictly prohibited in profoundly waters of monetary policy. Washington has gone even furr and threatens a trade war, which is now more propaganda than anything else: markets have reacted with new dollar declines that are explained by loss of confidence in American economic policy, in hands of Donald Trump's Twitter account.

There is tension in Frankfurt: The pigeons (supporters of stimuli) win by overwhelming majority, but yelps of Hawks ( most orthodox) sound ever stronger. The chief of all of m is Jens Weidmann, president of ECB, who is in campaign to succeed Draghi although it is still unclear wher he can count on support of Berlin. "Don't ask me about my successor: I still have a long time here," settled Draghi to press questions.


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