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Wednesday, June 26, 2013

INSTEAD OF LEADERS LIKE RONALD REAGAN AND MARGRET THATCHER WE GET BANKERS LIKE (European Central Bank President Mario Draghi ) WHO HAS THIS TO SAY ABOUT HOW TO MANAGE EUROPE.

http://www.bloomberg.com/news/2013-06-26/draghi-says-deficit-cuts-in-euro-area-should-be-growth-friendly.html

INSTEAD OF LEADERS LIKE RONALD REAGAN AND MARGRET THATCHER WE GET BANKERS LIKE (European Central Bank President Mario Draghi ) WHO HAS THIS TO SAY ABOUT HOW TO MANAGE EUROPE..
"European Central Bank President Mario Draghi said policy makers stand ready to act to support economic growth in the euro area, while calling on national governments to curb tax increases and prioritize investment"




Draghi Says ECB Ready to Act, Calls for Investment Over Tax

European Central Bank President Mario Draghi said policy makers stand ready to act to support economic growth in the euro area, while calling on national governments to curb tax increases and prioritize investment.
The ECB’s monetary policy “will stay accommodative for the foreseeable future,” Draghi said today in a speech at the French National Assembly in Paris. “We have an open mind about all other possible instruments that we may consider proper to adopt,” adding that an exit remains “distant.”
The Frankfurt-based ECB cut its benchmark interest rate to a record-low 0.5 percent in May after a six quarters of contraction in the 17-nation currency bloc. At the same time, euro-area nations including France, Spain and Italy have been granted more time by euro-area governments to bring their budget deficits into line with the region’s rules. As they do so, countries should take care not to hinder their economies in the longer term, Draghi said today.
Nations should “ensure that fiscal consolidation, which is necessary to contain debt levels, is made as growth-friendly as possible,” he said. “Relying less on tax increases would help sustain citizens’ disposable income. Prioritizing capital investment over current spending would do more to lay the foundations for future growth.”
The euro slid as much as 0.4 percent to $1.303 after Draghi’s comments. The currency was at $1.3035 at 11:41 a.m. in Frankfurt.

Long Way Off

Global central bankers from the ECB to the Bank of England and the Federal Reserve yesterday said they are still a long way off from tightening monetary policy. Financial markets have tumbled since Fed Chairman Ben S. Bernanke said last week that policy makers may start slowing the pace of bond buying later this year and end it entirely around mid-2014 if the U.S. economy gets on a path of sustainable growth.
Draghi said that the ECB’s primary mandate to ensure price stability doesn’t prevent it from taking action to spur economic growth.
“It never stood between working for growth,” he said. “It’s never been an obstacle. The stance here is to go back to the base scenario, persevere with the monetary policy stance that we have, wait for this return of confidence to find its way into the economy.”
Still, Draghi said governments must act to reduce unemployment and maintain social models without creating an unsustainable debt burden for future generations. The euro-area jobless rate rose to a record 12.2 percent in April, the European Union’s statistics office in Luxembourg said May 31.
“It is important to acknowledge that there are limits to what monetary policy can achieve,” Draghi said. “Monetary policy cannot create real economic growth. If growth is stalling because the economy is not producing enough or because firms have lost competitiveness, this is beyond the power of the central bank to fix.”
To contact the reporters on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net; Stefan Riecher in Frankfurt at sriecher@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
European Central Bank President Mario Draghi said, “It is important to acknowledge that there are limits to what monetary policy can achieve.” Photographer: Ralph Orlowski/Bloomberg
June 26 (Bloomberg) -- Azad Zangana, European economist at Schroder Investment Management, talks about European Central Bank President Mario Draghi's address to French lawmakers and the outlook for an activation of the Outright Monetary Transactions bond-purchasing program. He speaks with Francine Lacqua and Guy Johnson on Bloomberg Television's "The Pulse." (Source: Bloomberg)

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