Draghi and Artillery in ECB Open Country

The European Central Bank (ECB) approved yesterday, despite some internal resistance, which is expected to be the last package of measures to stimulate the economy of the euro zone, headed by its president Mario Draghi.

These measures basically abound in negative interest rates, in the recovery of the debt purchase program and in slightly increasing the cost to banks for having their liquidity deposited in the ECB itself. From this moment, the monetary policy will go to a second term and will have to be replaced by the fiscal policy and public investment programs of the Governments.

This penultimate Governing Council held under the presidency of Mario Draghi is also a summary of his legacy: service to all functions entrusted to the bank, also those supporting economic growth, without being kidnapped by the monolithism of inflation control.

Search for consensus but determination to act in case of disagreement; capacity for innovation and development of monetary policy in the form of “packages” of measures that feed each other interest rates, liquidity bars, purchase of assets, communication policy and they have allowed to add about two growth points to the eurozone in the last four years.

But before the growth of the eurozone, its very existence had to be saved. The Great Recession that gave rise to the debt crisis and a terrible economic crisis in two phases (2008 and 2011) would have resulted in an existential crisis of the euro and a probable depression had it not been for Draghi’s blunt clarity in promising 2012 that would do “everything that suits to save the euro.” And he did it, successfully.

For this, the ECB’s own institution, heiress of restrictive corsets and the bias towards austerity of the German Bundesbank, had to be re-founded. The Draghi ECB has ended up becoming one of the main European institutions, the most federal in the sense that all its policies are determined according to the whole.

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