Skip to main content

The Globe and Mail

Cheap ECB cash still key for euro zone economy: Draghi

Mario Draghi, President of the European Central Bank (ECB), attends an ECB conference titled ‘Communications Challenges for Policy Effectiveness’ at the ECB headquarters in Frankfurt am Main, western Germany, on Nov. 14, 2017.


The euro zone economy remains dependent on cheap credit and the European Central Bank is using the extension of its massive bond buys to push out any expectation for a rise in borrowing costs, ECB President Mario Draghi said on Friday.

Draghi said the ECB was becoming increasingly confident that the euro zone's economic recovery would continue but sluggish growth in wages meant monetary policy needed to remain easy.

"A key motor of the recovery remains the very favourable financing conditions facing firms and households, which are in turn heavily contingent on our policy measures," Draghi said.

Story continues below advertisement

The ECB is on course to buy €2.55-trillion ($3-trillion U.S.) worth of bonds after deciding last month to continue buying bonds until September, or beyond if needed.

It also pledged to keep its interest rates at their current, record low levels "well past" the end of its bond buys.

Draghi said this pledge made continued bond purchases key for pushing market expectations for the first rate hike further into the future, helping to keep rates low.

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Please note that our commenting partner Civil Comments is closing down. As such we will be implementing a new commenting partner in the coming weeks. As of December 20th, 2017 we will be shutting down commenting on all article pages across our site while we do the maintenance and updates. We understand that commenting is important to our audience and hope to have a technical solution in place January 2018.

Discussion loading… ✨