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Mario Draghi warns that the pace of growth is moderated in the eurozone

The ECB leaves unchanged interest rates and the debt-purchase program

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Mario Draghi warns that the pace of growth is moderated in the eurozone

The eurozone is advancing apace, with no major threats on horizon. The economy grew in last quarter of 2017 a potent 0.7%; And 2.4% all year round. Inflation, at 1.3% last March, gradually moves towards goal of European Central Bank (ECB) to be below but close to 2%. Despite se reassuring data, Draghi and his own see some menacing shadows about a recovery that already chains five years of uninterrupted growth.

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"The latest indicators suggest a moderation in pace of growth. This may be due to a relaxation with respect to high growth of late 2017 but y can also influence temporal factors. However, we anticipate that growth will remain solid, "said Draghi in Frankfurt.

After a good 2017 — European economy n recorded its best mark over last decade — continent is recently faced with some bad news, such as business confidence and backward industrial production. The clouds also influence purely circumstantial factors, such as strikes in France or Germany, cold that has gone more than usual and a very early Easter. The loss of impulse has been shared by almost all countries and sectors. In addition, some risks could materialize. Among se, Italian who is still a year and a half ahead of ECB cited protectionism, a threat that is now "more prominent."

Faced with se brakes and risks, Draghi adopted a moderately optimistic tone. He said that a certain "normalization" in growth rates has long been expected. And he did not heed those who demanded that, in view of this negative data, he would send some signal suggesting that he would drag his feet even furr in withdrawal of unconventional measures, a withdrawal that demands with increasing insistence countries of Norrn Europe, headed by Germany.

Euro and protectionism

In addition to cooling of economy, two issues overflew ECB Governing Council meeting: euro's contribution and growing risk of protectionism. On first issue, Draghi was calmed by stabilization of single currency in last few weeks slightly above 1.2 dollars. The ECB's head does not believe that anti-free trade trends are at moment a real threat, but it does study with concern wher verbal escalation of US president Donald Trump leads to a trade war.

For June it leaves Draghi Gordian knot of what it remains to do in front of ECB: to design how and when it stops buying debt and how and when it starts to raise types. For now, everything remains same: it will buy debt worth 30 billion euros per month until end of September "and even beyond if necessary." With three virtues summed up on Thursday Draghi his work of se months: "Patience, prudence and persistence."

Waiting for Luis de Guindos

The Thursday meeting of Governing Council of ECB was last of its Vice-President, Portuguese Vítor Constâncio. and 14th of June in Riga will be first with his successor, Spaniard Luis de Guindos.

In his last moments as Vice president, Constâncio said to leave with feeling of leaving work "almost done". "Monetary policy is not going to be as exciting in coming years as when I arrived," he added. Draghi launched a tribute to man who in so many press conferences has sat on his right, which he praised " passion" with which he defends his ideas. "You have been instrumental in decisions of se years," he said.


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