{"id":1494,"date":"2015-01-26T16:58:53","date_gmt":"2015-01-26T15:58:53","guid":{"rendered":"https:\/\/blog.iese.edu\/economics\/?p=1494"},"modified":"2015-04-20T17:00:07","modified_gmt":"2015-04-20T16:00:07","slug":"draghi-deploys-the-ecbs-full-artillery-a-reaction","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/economics\/2015\/01\/26\/draghi-deploys-the-ecbs-full-artillery-a-reaction\/","title":{"rendered":"Draghi Deploys the ECB\u2019s Full Artillery? A Reaction"},"content":{"rendered":"<figure id=\"attachment_1486\" aria-describedby=\"caption-attachment-1486\" style=\"width: 640px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/it.wikipedia.org\/wiki\/Mario_Draghi#mediaviewer\/File:Mario_Draghi_-_World_Economic_Forum_Annual_Meeting_2012.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-1486 size-full\" src=\"https:\/\/blog.iese.edu\/economics\/files\/2015\/01\/800px-Mario_Draghi_-_World_Economic_Forum_Annual_Meeting_2012.jpg\" alt=\"DAVOS\/SWITZERLAND, 27JAN12 - Mario Draghi, President, European Central Bank, Frankfurt is captured during the session 'Europe's Economic Outlook' at the Annual Meeting 2012 of the World Economic Forum at the congress centre in Davos, Switzerland, January 27, 2012.. . Copyright by World Economic Forum. swiss-image.ch\/Photo by Monika Flueckiger\" width=\"640\" height=\"431\" srcset=\"https:\/\/blog.iese.edu\/economics\/files\/2015\/01\/800px-Mario_Draghi_-_World_Economic_Forum_Annual_Meeting_2012.jpg 640w, https:\/\/blog.iese.edu\/economics\/files\/2015\/01\/800px-Mario_Draghi_-_World_Economic_Forum_Annual_Meeting_2012-300x202.jpg 300w, https:\/\/blog.iese.edu\/economics\/files\/2015\/01\/800px-Mario_Draghi_-_World_Economic_Forum_Annual_Meeting_2012-624x420.jpg 624w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/a><figcaption id=\"caption-attachment-1486\" class=\"wp-caption-text\">Mario Draghi &#8211; World Economic Forum Annual Meeting 2012. Photo by Monika Flueckiger<\/figcaption><\/figure>\n<p>The best commentary came from the Spanish daily <em>Expansi\u00f3n.<\/em>\u00a0They gave us nine pages on Draghi\u2019s measures and a headline from a statement made by <strong>Francisco Gonz\u00e1lez<\/strong>, president of BBVA: \u201c<a class=\"inline-twitter-link inline-tweet-click\" href=\"#\" onclick=\"inline_tweet_sharer_open_win('https:\\\/\\\/twitter.com\\\/intent\\\/tweet?url=https%3A%2F%2Fblog.iese.edu%2Feconomics%2Fwp-json%2Fwp%2Fv2%2Fposts%2F1494%2F&text=The+ECB+cannot+fix+%5Ball%5D+the+problems+');\" title=\"Tweet This!\">The ECB cannot fix [all] the problems <span class=\"non-dashicons\"> <\/span><\/a>\u201d (note &#8211; I added the &#8220;all&#8221; to that statement). <strong>Draghi was already talking<\/strong>, a few months ago, <strong>of measures that needed to be taken in three different areas: Monetary policy (him), fiscal policy (the national governments and the European Commission) and structural reforms (national governments)<\/strong>.<\/p>\n<ul>\n<li>Dangerous decisions. <strong>They have focused on driving monetary stimulus to the limit, when what they really should have been doing was taking action on other fronts<\/strong>. It\u2019s the same as saying: If the already-large dose of medicine doesn\u2019t completely cure the patient, let\u2019s increase the dose. But is this always the right course of action?<\/li>\n<li>The ECB has done the one thing we expected, and the one thing it could do better: <strong>It has not explored alternative medicines that might have done the patient some good<\/strong>. Further down the road, the patient might well accuse them of not doing everything they could have.<\/li>\n<li><strong>The markets have approved the measures<\/strong>. No surprise there. <strong>Mass purchase of debt is music to the ears of any lender<\/strong> (banks, funds, etc.)<\/li>\n<li><a class=\"inline-twitter-link inline-tweet-click\" href=\"#\" onclick=\"inline_tweet_sharer_open_win('https:\\\/\\\/twitter.com\\\/intent\\\/tweet?url=https%3A%2F%2Fblog.iese.edu%2Feconomics%2Fwp-json%2Fwp%2Fv2%2Fposts%2F1494%2F&text=The+measure+has+resulted+in+a+depreciated+euro.+This+is+good+for+exporters+and+it%3Fs+good+for+all+economies+');\" title=\"Tweet This!\">The measure has resulted in a depreciated euro. This is good for exporters and it\u2019s good for all economies <span class=\"non-dashicons\"> <\/span><\/a>. <strong>But it\u2019s quite different from the definitive solution<\/strong>, which is relaunching national economies.<\/li>\n<li><strong>Interest rates on bonds will continue to drop<\/strong>, and perhaps even dip into negative territory. But this has already been going on for some time. <strong>The hope is that bondholders will react by buying other assets with higher risk; lending to companies, for instance<\/strong>. The banks have not been doing enough of this in the recent past: Will other financial institutions take up the reins? <strong>And do European companies, especially small and medium-sized enterprises, have easy access to markets, in countries that, up until now, have depended almost entirely on banks?<\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The best commentary came from the Spanish daily Expansi\u00f3n.\u00a0They gave us nine pages on Draghi\u2019s measures and a headline from a statement made by Francisco Gonz\u00e1lez, president of BBVA: \u201c\u201d (note &#8211; I added the &#8220;all&#8221; to that statement). Draghi was already talking, a few months ago, of measures that needed to be taken in [&hellip;]<\/p>\n","protected":false},"author":172,"featured_media":1582,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[651],"tags":[38444,625,81628],"class_list":["post-1494","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-european-union","tag-bce","tag-euro","tag-mario-draghi","megacategoria-mc-economics","megacategoria-mc-finance"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/posts\/1494","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/users\/172"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/comments?post=1494"}],"version-history":[{"count":7,"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/posts\/1494\/revisions"}],"predecessor-version":[{"id":1618,"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/posts\/1494\/revisions\/1618"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/media\/1582"}],"wp:attachment":[{"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/media?parent=1494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/categories?post=1494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.iese.edu\/economics\/wp-json\/wp\/v2\/tags?post=1494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}