The eurozone economy is coping well with global uncertainty – including Britain’s vote to leave the European Union – according to the head of the European Central Bank, Mario Draghi.
Point of view
For the euro area to thrive, actions by national governments are needed to unleash growthPresident, European Central Bank
So far, he said, it “has been resilient”.
He also told the European Parliament in Brussels that the UK should only be given access to the EU single-market if it follows EU rules over the free movement of labour, capital, goods, and services: “Regardless of the type of relationship that emerges between the European Union and the United Kingdom, it is of utmost importance that the integrity of the single market is respected. Any outcome should ensure that all participants are subject to the same rules.”
Draghi: Integrity of the single market must be respected regardless of future UK-EU relationship— ECB (@ecb) September 26, 2016
Draghi risked the wrath of Berlin by repeating his appeal for more economic reforms by governments and greater spending by those that can afford it to avoid a long period of weak economic growth for the eurozone.
He said: “For the euro area to thrive, actions by national governments are needed to unleash growth, reduce unemployment and empower individuals, while offering essential protections for the most vulnerable.”
Those remarks were aimed principally at Germany, the country in the currency bloc with the biggest budget surplus.
The German government prefers to balance its books, spurning borrowing even though experts say it needs to spend on aging infrastructure
Berlin blames the ECB’s low interest rates for eroding the savings of thrifty Germans and profit margins for banks.
Draghi will be going into the lion’s den on Wednesday when he is due to testify before Germany’s parliamentary finance and budget committees.
Reportedly German Finance Minister Wolfgang Schaeuble has urged members of the committees to ask tough questions about the ECB’s monetary policy.
Schaeuble has also blamed the ECB’s policies for the recent rise of a right-wing anti-immigration party, Alternative for Germany, which made huge gains in two regional elections.