The banking maneuver to avoid repeating the “drama” of the clauses ground why is the new plan of stimulus from Draghi?Draghi shoots slightly below expectations
The division between “hawks” and “doves” had not gone until now a topicazo with which to animate a little the often sleepy chronicles of european monetary policy. Always maintained a healthy balance between those who cling to the statute of the ECB, which limited its powers to the control of inflation (“hawks”) and those who wish to use the institution as a political tool without polls or parliamentary control with which to mobilize the GDP (“doves”). He was already about to come crashing down with the crisis, as one of the founding fathers of the euro, acknowledged in a meal in Berlin that “we provide the Governing instruments to support the presence of a black sheep; the problem is that the black sheep are now majority”. In April 2016, the then German Finance minister Wolfgang Schäuble maintained a tense conversation with Mario Draghi in which reproached him: “you Can be very proud and atribuirte at least 50% of the results of the election of a new party anti-european in Germany that feeds your monetary policy”. Referring to the Alternative for Germany (AfD), a formation with presence in all the regional parliaments and the German main force of the opposition in the Bundestag, one of whose priority goals is to bring to Germany of the euro or, failing that, to restrict the single currency to a club further reduced in the european periphery would not have fit. But, despite all these tensions, the one and the other kept the forms. Until the last meeting of the Council, on the 12th of September, when it became clear the curse that weighs on the inheritance of Draghi.
she had Just finished the meeting and the Italian communicated his new stimulus package, which extends “sine die” zero rates, narrows the margins of the banks and launching a new bond purchase programme, the president of the German Bundesbank and visible head of the “falcons”, Jens Weidmann, he broke the unwritten rule of hierarchy of communication, and declared it in public, and the popular German newspaper “Bild Zeitung”, the largest circulation in Europe, Draghi had “exceeded the limits”. It was a declaration of war was confirmed by the coordinated action with the rest of the “hawks”. The Dutch Klaas Knot reported measures “disproportionate” and Robert Holzmann, president of the central bank, austrian, acknowledged in an interview with “Bloomberg TV” the idea that the ECB is making a serious mistake, “has definitely crossed my mind.” Sources from the ECB have been leaked, in addition, that François Villeroy de Galhau, governor of the Bank of France, did not agree during the discussion with the new purchases of debt, a decision that was not voted on because Draghi considered that “the majority was clear.”
this internal rebellion, is added to the banking sector, which refuses to fulfill the role of transmission belt for the policy of Draghi and that has left virtually deserted the first auction of liquidity, extraordinary (TLTRO (III) . In place of the stimulus, opting for the drainage of liquidity and are paying in advance almost 32,000 million euros of the previous program.
Guilt, divided
this inheritance poisoned that receives Christine Lagarde, however, it is not Draghi the only culprit. “The Italian is aware that he is forcing the machine”, supported sources of Fránkfurt, “but decides to the desperate while continue without acting governments”. He was referring to the paralysis of the grand coalition of germany, the lack of government in Italy until a week ago, and the eternal functionality of the Spanish government . “There was unanimity in that the fiscal policy should now become the main instrument,” insisted Draghi in his last appearance before the media.
Lagarde is facing, therefore, a fatal decision in his first year: to lower the arms in the attempt to revive inflation, or yield to the temptation to continue helping the governments of the bloc with a program infinite bond purchases. On his first day in office, November 1, the day it resumes the program of debt purchases, Lagarde will need to align the lavish promise of Draghi with the rules that prohibit the central bank to finance the deficits of the nations of the euro zone.
