Draghi Says ECB Policy Has Helped Reduce Inequality
June 26 2017 - 1:27PM
Dow Jones News
By Tom Fairless
LISBON -- European Central Bank President Mario Draghi defended
the impact of the bank's stimulus policies on Europe's youth
Monday, arguing that keeping interest rates low had helped create
jobs and reduce inequality.
The rare question-and-answer session with Mr. Draghi, at a
university in Lisbon, comes at a sensitive time for the ECB, which
is preparing to discuss how to start withdrawing policies such as
negative interest rates and a EUR2.3 trillion ($2.6 trillion)
bond-buying program.
Pressure is mounting in Northern Europe for a policy change from
Frankfurt, but Southern European countries face a different
economic reality, with youth unemployment rates reaching up to
45%.
Mr. Draghi argued that the ECB's easy-money stance helped
address the problem of inequality in Europe, which he described as
a "highly destabilizing phenomenon."
"The biggest cause of inequality is unemployment," Mr. Draghi
said. "To the extent our policy fights unemployment, it fights
inequality."
While he didn't directly address when the central bank might
start withdrawing its stimulus, he indicated it would be
counterproductive to do so too soon.
Tackling a question from Germany on how millennials could build
up wealth in an environment of low interest rates, Mr. Draghi
argued that those young people "who got a job thanks to our
monetary policy" might not be so opposed to low rates.
German officials have attacked the ECB's easy-money policies in
recent years, arguing that they harm savers and pensioners.
"Let's not forget that savings come from growth," Mr. Draghi
said. "Interest rates have to be low for growth to recover."
Write to Tom Fairless at tom.fairless@wsj.com
(END) Dow Jones Newswires
June 26, 2017 14:12 ET (18:12 GMT)
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