Based on the latest comments from the head of the European Central Bank Mario Draghi, don’t expect eurozone interest rates to be going up any time soon.
On Wednesday he said it was still too early to declare victory in the ECB’s efforts to boost the region’s economic recovery and push up inflation from super low levels.
Draghi told a session of the Lower House of the Dutch Parliament that the recovery “has evolved from being fragile and uneven into a firming, broad-based upswing”, but he is still worried about job creation and wage growth.
Richer eurozone countries – such as Germany and the Netherlands – has said they want the ECB to reduce its stimulus measures that are pumping billions into the region’s economy. They would also like it to start putting up the cost of borrowing.
At Wednesday’s session, Draghi was given a hard time by several Dutch lawmakers.
One of them, Tony van Dijck, complained about continued low interest rates and accused Draghi of depriving people of returns on their savings, saying “You’re not a hero” in the Netherlands.
In response Draghi said the stimulus had benefited the eurozone economy and ordinary people by helping boost employment.
The ECB president insisted the benefits of the ECB’s monetary stimulus were outweighing its side effects, but he did acknowledge rising property prices and high household debt in some countries, including the Netherlands.
“We do not currently see compelling evidence of overstretched asset valuations at the euro area level, but we do see that real estate dynamics or high household debt levels in some countries signal the risk of increasing imbalances,” Draghi said.
“Such risks also exist in the Netherlands.”