Germany’s Chancellor Angela Merkel holds a news conference after a EU summit in Brussels yesterday. Der Spiegel reported yesterday that Merkel and Finance Minister Wolfgang Schaeuble had both called ECB President Mario Draghi last week to take him to task about comments he made in a speech at Jackson Hole, Wyoming on August 22.
Reuters/Berlin
A German news magazine reported yesterday that Chancellor Angela Merkel is unhappy with European Central Bank chief Mario Draghi for apparently proposing a greater emphasis on fiscal stimulus over austerity in order to boost growth in Europe.
Der Spiegel reported, without citing any sources, that she and Finance Minister Wolfgang Schaeuble had both called the ECB president last week to take him to task about comments he made in a speech at Jackson Hole, Wyoming on August 22.
A German government spokesman contradicted Spiegel’s version of events, however, saying that “the assertion that the chancellor took President Draghi to task does not correlate to the facts in any way”. The spokesman would give no further details of the call. Draghi told a conference of central bankers that it would be “helpful for the overall stance of policy” if fiscal policy could play a greater role alongside the ECB’s monetary policy.
The magazine said Merkel wanted to know if the ECB had decided to change tack away from fiscal austerity in the eurozone, as championed by Germany, among others.
Der Spiegel said Draghi had defended his Jackson Hole speech, which was interpreted as meaning that the ECB, having cut interest rates to record lows and injected money into the economy to support a recovery, was now looking at fiscal stimulus as a way of fomenting growth and facilitating reform.
Schaeuble said last week that he believed Draghi’s comments had been “over-interpreted”.
“The ECB has a clear mandate to ensure currency stability. It doesn’t have a mandate to finance states,” the minister told reporters yesterday. “All those who can’t manage within their budget want to cross that boundary. They would like to get (financing) from the ECB.”
Italian Prime Minister Matteo Renzi is leading a push for less focus on austerity and more room for manoeuvre within the European Union’s budget rules, backed by France, whose Prime Minister Manuel Valls yesterday reiterated calls for the ECB to go “further” in tackling the problem of an overvalued euro.