ECB’s Draghi warns of increasing downside risks

The new head of the European Central Bank has warned the European Parliament that risks threatening the economic outlook have increased.

Mario Draghi was speaking as various euro zone countries had been finding it increasingly difficult to borrow money by selling bonds.

The ECB has been buying bonds, but Draghi warned it cannot continue that forever.

“Dysfunctional government bond markets in several euro area countries hamper the single monetary policy.This is the very important monetary policy reason for ECB’s non-standard measures. But of course, such interventions can only be limited,” he said.

Draghi hinted that the ECB could do more to fight the euro zone debt crisis but for that governments would have to move towards fiscal union. He added that a major goal is still to keep prices stable, both from rising and falling.

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