ECB’s Draghi walks the line
After today’s news conference we would happily endorse a new skill on Mario Draghi’s LinkedIn profile: Tightrope walking.
Draghi – having just returned from a summer holiday and looking a lot more relaxed than a month ago – tried to convince markets that the euro zone economy was recovering as expected, yet not sounding too upbeat to warrant higher market rates.
And so he did. Recent confidence indicators confirmed the expected gradual improvement in the economy, he told a smaller than usual crowd of journalists – whether the low attendence was down to the blue sky and 30 degrees outside or the brighter economic climate remains unclear.
Yet, the green shoots of recovery were “still very, very green”, he stressed. Giving a rare and, by journalists much appreciated window into the nature of debate at the Governing Council meeting, he revealed that some governors thought the economic revival did not justify a discussion about another rate cut, while others thought that the recovery was too weak not to discuss it. So the Council left everything as is for now – also in the absence of one arch-dove. ECB Vice-President Vitor Constancio did not attend today’s meeting due to personal reasons.
And the vice-president will be pleased to see that Draghi left the door to another rate cut wide open. “We would stand ready to take appropriate action if needed,” he said.
After one hour, the news conference came to an elegant end when a journalist from a Japanese news organisation asked Draghi why the ECB’s bond purchase programme was working without one cent spent while the Federal Reserve and the Bank of Japan had to spend hundreds of billions to convince markets.
“It is very hard to answer this question without flattering oneself,” Draghi said and launched into a very technical explanation. “Anyway, thanks for asking,” he said and smiled, gathering his papers, taking more time than usual.
He walked the line.