European Central bank boss
Draghi is one of many senior European policymakers who believe that southern European governments are lazy and corrupted by easy credit. It's a view he shares with
Making a broader point, he said the stability of the eurozone depended "not on having more flexibility" but on enforcing the existing fiscal rules. "To unwind the consolidation that has been achieved, and in doing so, divest the rules of credibility, would be self-defeating for all countries," he said.
The speech came only a few months after Renzi's elevation to the premiership and his pitch to
Then, last Thursday, Draghi told journalists at his monthly press conference that eurozone interest rates would be staying low for a long time to help the eurozone recover. Appearing doveish and conciliatory, he added that he was prepared to make credit cheaper still with a version of quantitative easing (QE) but, switching to a more hawkish tone, he added that the time for flooding the banking system with cash,
He is wrong.
The Renzi administration is dealing with an economy in recession for a third time. The government's finances are getting weaker. One firm of analysts said last week that only with higher growth and higher inflation could
But it appears almost outlandish to forecast a return to the average 1.5% growth rate
Fathom added: "With no growth, no inflation, and of course no currency of its own, something needs to give, and soon, if
Just as Draghi was holding his press conference in
Draghi won't be impressed. He wants broader labour market reforms and an end to restrictions on setting up businesses, changes to tax rules that tie businesses in knots and an end to wasteful subsidies.
Renzi has promised to tackle these in 2015. But without Draghi rolling out QE, he doesn't stand a chance.
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