European Central Bank President Mario Draghi warned that the euro-area economy faces agglomerating risks including Brexit and the danger that trade protectionism could hurt confidence.
Draghi said recent figures confirm a “slowing growth momentum” as global issues dent sentiment. He added that the ECB will consider whether it needs to mitigate any of the side-effects from its negative interest rates, speaking after the institution kept its key rates unchanged with its deposit rate held at minus 0.4 percent.
The president also said the ECB is “fully committed” to restoring inflation to its goal of just under 2 percent. The central bank has promised a new round of cheap funding for banks later in the year, but is holding off from announcing details. It’s “too early” to decide on negative rates or on the criteria for bank loans, with a decision coming at a “forthcoming meeting,” Draghi said.
Right now, the question is whether the economy stabilizes or the slowdown that dominated much of 2018 continues throughout this year.
There’s still plenty to worry about, including Donald Trump’s trade threats, Italy’s precarious fiscal situation and uncertainty over when and how the U.K. will leave the European Union. As Draghi spoke, EU leaders were gathering in Brussels for an emergency meeting at which they may force Britain to delay its departure from the bloc for as much as a year.
Source : Bloomberg