Michael Every, Research Analyst at Rabobank, suggests that it was hardly
a surprise that on Friday Mr. Draghi immediately walked back some of
Thursday’s less-dovish-than-expected ECB rate decision by boldly
declaring that ‘No (no, no no no no, no no no no, no no), there’s “no
limits” to what the ECB will do’.
Key Quotes
“When former BoE governor Mervyn King asked the ECB president on camera if that statement was aimed solely at financial markets he replied, “Not really,...well, of course.” That sums up present day ‘too unlimited’ central banking nicely.”
“Yet there are worrying political portents that may transcend even what the ECB can promise to deliver. Notably, France’s openly anti-EU/anti-Euro Front National (FN) is likely to win 30% of the vote in regional elections, matching a trend towards populists and the hard-right elsewhere in Europe. Is the EU nimble enough to respond to this latest internal threat to the status quo, which sits alongside that of a potential Brexit in 2016?”
“For now it seems to be responding to this backlash in a FIFA-esque fashion, with its latest move being to force Greece, already under Troika fiscal control, to partially cede border control – and hence de facto national sovereignty - to EU Frontex agents in order to manage a refugee crisis that Greece did not create, cannot afford, and has not encouraged.”
Key Quotes
“When former BoE governor Mervyn King asked the ECB president on camera if that statement was aimed solely at financial markets he replied, “Not really,...well, of course.” That sums up present day ‘too unlimited’ central banking nicely.”
“Yet there are worrying political portents that may transcend even what the ECB can promise to deliver. Notably, France’s openly anti-EU/anti-Euro Front National (FN) is likely to win 30% of the vote in regional elections, matching a trend towards populists and the hard-right elsewhere in Europe. Is the EU nimble enough to respond to this latest internal threat to the status quo, which sits alongside that of a potential Brexit in 2016?”
“For now it seems to be responding to this backlash in a FIFA-esque fashion, with its latest move being to force Greece, already under Troika fiscal control, to partially cede border control – and hence de facto national sovereignty - to EU Frontex agents in order to manage a refugee crisis that Greece did not create, cannot afford, and has not encouraged.”
