Draghi defies Germany. Merkel calls for a response

German publication Der Spiegel on Sunday published an article that says that German Chancellor Angela Merkel expressed dissatisfaction head of the ECB, Mario Draghi, who in turn proposed to abandon the stringent austerity measures.

Merkel unhappy statements Draghi

According to the publication, and Ms. Merkel and German Finance Minister Wolfgang Schaeuble require Draghi explain his speech in Jackson Hole on 22 August. Recall that at the annual symposium ECB President expressed the hope that fiscal policy played an important role, along with monetary policy. According to Der Spiegel, Merkel wants to understand exactly what Mario Draghi had in mind and whether his statement calling for the departure from the austerity measures, which have insisted Germany.

Meanwhile, Der Spiegel explains the position Draghi, who brought rates to record low levels and now calls on politicians to consider fiscal policy as another tool to stimulate the economy. Fiscal policy is not within the mandate of the Central Bank, so besides calling words Draghi can not be named.

However, German Finance Minister Wolfgang Schäuble has already Mr. declare that the statements Draghi was just misinterpreted, however, this statement may raise questions. The fact that Draghi is not alone in his opinion, and some countries are also actively advocate the relaxation of fiscal policy, which should help the economy and give more room to maneuver. With such statements, in particular, serve France and Italy.

The upcoming meeting of the ECB

This week, a regular meeting of the ECB, and it should be noted, it will take place against the backdrop of disappointing economic data. Moreover, with each passing month it becomes clear that inflation in the euro area is constantly striving to zero. On Friday, data released in August, and the growth of consumer price index rose by only 0.3%, while in Italy and does deflation of 0.2% in annual terms.

Nevertheless, experts do not expect that the ECB will decide to change their policies already at this meeting, the more tools that he is not much on the background of what is growing intrigue of what’s new Thursday market will tell the chairman of the ECB.

With regard to inflation, then disperse it still does not work, and after entering the Russian embargo on European food do it becomes even more difficult.