–Updates with comments on larger firewall, impact on EMU
WASHINGTON (MNI) – The European Central Bank’s Governing Council
has not discussed following the International Monetary Fund’s advice to
further lower interest rates, ECB President Mario Draghi said Friday.
Asked during a press briefing in Washington what he thought of the
IMF’s view and the wisdom to share these views, Draghi said: “It’s a
free world.” However, the Governing Council has not discussed following
the advice — “at least not recently,” he said.
Draghi stressed the importance of price stability in ensuring
growth and said financial stability should not be underestimated, while
“inflation expectations remain solidly anchored.”
After the G20 and the IMF decided to further boost the IMF’s
resources by around $430 billion, Draghi said the larger firewall will
be a useful tool in helping reduce sovereign debt market tensions.
“Certainly, to have a firewall of this size is a very useful tool
to address what I would call the … excessive volatility of the various
assets markets, especially the sovereign debt markets and the CDS
market,” Draghi said.
However, he stressed that “the structural reforms and the fiscal
consolidation have to be in place.” Without convincing fiscal and
structural reform efforts, no firewall can be large enough, he said.
On this front, Draghi noted that “both Italy and Spain, but also
the program countries are making progress … They will have to continue
working but what they have done already is remarkable. ”
–Frankfurt newsroom +49 69 72 01 42; e-mail: jtreeck@marketnews.com
[TOPICS: M$$CR$,M$X$$$,M$$EC$,MGX$$$]
