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Draghi brushes off German backlash

Thursday, April 21, 2016 - 01:36

ECB President Mario Draghi keeps borrowing costs at rock bottom levels in spite of a barrage of German criticism of his recipe for tackling the euro zone's economic malaise. David Pollard reports.

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There was of course the main business of the day. Rates and QE left at current levels - as expected. And the usual pledge to use all tools necessary, for as long as necessary. Then came what everyone was waiting for. SOUNDBITE (English) REPORTER ASKING QUESTION: "Mr Draghi, how do you respond to the German criticism of the ECB and personally of you?" SOUNDBITE (English) PRESIDENT, EUROPEAN CENTRAL BANK, MARIO DRAGHI, SAYING: "We have a mandate to pursue price stability for the whole of the euro zone, not only for Germany. This mandate is established by the Treaty, by the European law. We obey the law, not the politicians." And there was spirited defence of his stimulus programmes. SOUNDBITE (English) PRESIDENT, EUROPEAN CENTRAL BANK, MARIO DRAGHI, SAYING: "Our policies work, they are effective. Just give them time to fully display their effects." But negative interest rates are damaging German banks, pensioner savings - and fuelling euro-sceptic anger. The sheer force of those accusations over past weeks has perhaps obscured the sheer scale of ECB policy. After a surprise package of new measures at its March meeting, its money printing scheme now stands at 1.7 trillion euros. His biggest bazooka, though, could still be his own credibility. SOUNDBITE (English) ETX CAPITAL HEAD OF TRADING, JOE RUNDLE, SAYING: "That his is main tool now. He's got to get the markets, and the economies and the banks to really buy into what he's saying, and take action on the back of it." That - or get used to low-to-no inflation. Draghi telling this meeting that the current zero rate could turn negative again in coming months.

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Draghi brushes off German backlash

Thursday, April 21, 2016 - 01:36