FOREX TradingCharts.com

Financial News: ECB's Praet Says Populist Narrative Against Euro Deceptive

ECB's Praet Says Populist Narrative Against Euro Deceptive

03/24/2017 - 09:53:00 (RTTNews)

(RTTNews) - Populist narrative that things were better before the euro is a deception and the single currency and EU are made scapegoats, European Central Bank Executive Board member Peter Praet said.

"What I do worry about is the populist narrative that things were better before the euro. This is a deception!," Praet, who is the chief economist of the ECB, said in an interview to the Italian newspaper Il Sole 24 Ore, published Friday.

Some key Eurozone countries have general elections this year and populist parties, some of whom seek a return to national currencies, are gaining favor.

"What I think opinion polls show is a disaffection with the general situation, of which the euro is made a scapegoat," Praet said.

"The nostalgic alternative that everything will be alright just by returning to the lira amounts to fooling the people."

The cost of a regime change would be huge and the poor would be the ones that suffer the most, he added.

The ECB would continue to be a source of stability in a volatile environment, but the bank's mandate is limited as structural policies are the responsibility of governments, Praet pointed out.

Regarding monetary policy, Praet said talks of an exit from stimulus are "premature".

"We are more confident on growth," the policymaker said. "But the economic outlook is still conditional on maintaining a substantial degree of monetary accommodation."

The economist also noted that there was no sign of a pickup in underlying inflation, which could occur when the output gap closes. Wage pressures remain subdued and there is more slack in the labor markets than unemployment rates show, Praet said, urging patience.

The ECB's policy stance remains appropriate and measures are working, the policymaker said.

He dismissed market interpretation of any preparation for an exit saying that "against the backdrop of better economic conditions, and after such a long period of monetary policy accommodation, markets are very sensitive to any signal that may suggest a change in the policy stance".

Praet also stressed that the Governing Council has not signaled a change in the policy stance, including its forward guidance.

"We reiterated it," he said. "We had no discussion on sequencing in the Governing Council."

This month, Bank of Italy Governor Ignazio Visco said that the ECB may shorten the time it takes to raise interest rates after exiting quantitative easing.

Quizzed on the same, Praet said, "We do not give a date for when that will be."

"The Governing Council will decide in due time how long the "well past" will be," he added.

On the protectionist tendencies of new administrations, especially in the U.S., Praet said no concrete action has been observed yet, but the fact that the basis of multilateralism is questioned is one of the biggest worries.

In a separate interview with the German newspaper VDI Nachrichten, also published on Friday, Praet reiterated his views on populism.

Problems and grievances in societies are being transformed into the expression of a general rejection, he noted.

People voting for populists must know that although they would live in smaller, easier-to-control markets, it would also mean much higher prices for consumers and reduced prosperity, the ECB policymaker cautioned.

"Basically, as I see it, people vote for populists in order to protest, but not to reject the EU as such," he said.

On Brexit, Praet said the event does not pose any risk to financial stability as the financial crisis in the recent past gave lessons on how to handle dangerous situations.

"What concerns me are the massive costs that the withdrawal will cause for the EU27 and, above all, for the UK," he added.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2017 RTTNews.com. All Rights Reserved

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS


U.S. Consumer Sentiment Nearly Unchanged In April (10 hr(s), 49 min(s), 57 sec(s) ago)
(RTTNews) - After initially reporting an improvement in U.S. consumer sentiment in the month of Ap ...Full Story»

Chicago Business Barometer Unexpectedly Indicates Faster Growth In April (11 hr(s), 09 min(s), 57 sec(s) ago)
(RTTNews) - A report released by MNI Indicators on Friday showed an unexpected acceleration in the ...Full Story»

Eurozone Inflation Climbs To ECB Target (11 hr(s), 34 min(s), 57 sec(s) ago)
(RTTNews) - Eurozone inflation accelerated more-than-expected in April, returning within the Europ ...Full Story»

U.S. Economic Growth Slows More Than Expected In Q1 (12 hr(s), 14 min(s), 57 sec(s) ago)
(RTTNews) - Economic growth in the U.S. slowed by more than anticipated in the first three months ...Full Story»

ECB Forecasters Revise Up Growth & Inflation Expectations (12 hr(s), 30 min(s), 57 sec(s) ago)
(RTTNews) - Professional forecasters expect euro area consumer prices to rise faster than earlier ...Full Story»

UK Growth At 1-Year Low As 'Brexit' Weighs On Spending (12 hr(s), 40 min(s), 57 sec(s) ago)
(RTTNews) - The U.K. economy expanded the least in a year at the start of 2017, reflecting a notab ...Full Story»

U.S. GDP Increases Less Than Expected In Q1 (12 hr(s), 47 min(s), 57 sec(s) ago)
(RTTNews) - Economic growth in the U.S. slowed by more than anticipated in the first three months ...Full Story»

Sweden Retail Sales Growth Eases Unexpectedly (13 hr(s), 07 min(s), 57 sec(s) ago)
(RTTNews) - Sweden's retail sales growth eased unexpectedly in March, after accelerating in th ...Full Story»

Search

INTERNATIONAL FINANCIAL NEWS

U.S. Consumer Sentiment Nearly Unchanged In April

04/28/2017 - 10:35 AM (RTTNews)
(RTTNews) - After initially reporting an improvement in U.S. consumer sentiment in the month of Ap ...Full Story>>

Chicago Business Barometer Unexpectedly Indicates Faster Growth In April

04/28/2017 - 10:15 AM (RTTNews)
(RTTNews) - A report released by MNI Indicators on Friday showed an unexpected acceleration in the ...Full Story>>

Eurozone Inflation Climbs To ECB Target

04/28/2017 - 09:50 AM (RTTNews)
(RTTNews) - Eurozone inflation accelerated more-than-expected in April, returning within the Europ ...Full Story>>

U.S. Economic Growth Slows More Than Expected In Q1

04/28/2017 - 09:10 AM (RTTNews)
(RTTNews) - Economic growth in the U.S. slowed by more than anticipated in the first three months ...Full Story>>

ECB Forecasters Revise Up Growth & Inflation Expectations

04/28/2017 - 08:54 AM (RTTNews)
(RTTNews) - Professional forecasters expect euro area consumer prices to rise faster than earlier ...Full Story>>
These pages, and all content ©TradingCharts.com Inc and other copyright holders. Permission is not granted to redistribute charts, data, news or other information found on this site, in any manner. Although it is believed that information provided is accurate, TradingCharts will not accept liability for any loss or damage that may arise from use of the content, inability to access the website, or delay or failure of receive of any information provided through this site.