BRUSSELS (Reuters) – European Central Bank President Mario Draghi repeated a dovish monetary policy message to European Union leaders on Friday, saying that any deterioration in economic conditions that would threaten a return to the ECB’s inflation would trigger additional stimulus from the bank.
Draghi told the leaders that the economy of the 19 countries sharing the euro was now robust, but with increasing signs of weakness and that the economic rebound was weaker than expected with pervasive uncertainty in global trade for more than a year.
“In the absence of improvement, such that a sustained return to the ECB’s inflation target is threatened, additional stimulus will be required,” Draghi was to tell EU leaders according to an EU source with insight into the meeting.
Draghi told the 27 heads of state and government that monetary policy took the most of the burden over the last 8 years and noted that fiscal policy this year and next year would be mildly expansionary.
“But in case of a deterioration it will have to be much more expansionary,” Draghi told the leaders, underlining the importance of introducing an U deposit guarantee scheme and completing a capital markets union.
The EU official said Draghi received a standing ovation from EU leaders when he mentioned this was his last EU summit before he steps down from his post in October.
(Reporting By Jan Strupczewski)