Brussels, 27/08/2014 (Agence Europe) - Germany says that the comments by European Central Bank President Mario Draghi about making greater use of budget policy to stimulate demand have been “over-interpreted”.
“I know Mario Draghi very well and I think that his comments have been over-interpreted”, said German Finance Minister Wolfgang Schäuble in an interview in Passauer Neue Presse on Wednesday 27 August.
Downplaying the comments made by Draghi (the former governor of the Bank of Italy), Schaüble said that Germany's position on economic issues had not changed. Growth cannot take off until member states have introduced structural reforms to make their economies more flexible.
Faced with lack-lustre growth and persistently low inflation in the eurozone, the head of the ECB made a speech last week at an annual meeting of the world's central bankers at Jackson Hole in the United States in which he recommended making greater use of budget policies at national and European levels (see EUROPE 11139). He said it would be useful for budget policies play a bigger role alongside monetary policy. Draghi called for use of the flexibility available under the stability and growth pact rules to stimulate growth and cover some of the cost of structural reforms. He approved of the idea of a big investment programme at EU level. (MB)