American and European pundits
gave economic stimulus measures taken by European Central Bank
(ECB) President Mario Draghi a mixed reception Friday, echoing
the fears of many in the business community that lenient central
bank policies might provide "undisciplined" countries such as
Italy another excuse to delay key reforms.
Draghi on Thursday announced the ECB will begin to buy
asset-backed securities (ABS) and covered bonds in October to
encourage credit flows and economic growth, while also cutting
its main interest rates for commercial banks and lowering many
of its forecasts for economic growth and inflation.
But the central bank apparently stopped short of outright
quantitative easing of the style used by the United States
Federal Reserve, although Draghi gave notice that if necessary,
the ECB could still implement "unconventional" measures.
Draghi has launched a "counteroffensive" against deflation
and weak eurozone demand, but his chosen course may be fraught
with difficulties, the Financial Times of London editorialized.
For one thing, it said, he will have to make sure the ABS
purchases are "big enough to make a difference".
"The concern is that unconventional measures will ease the
pressure on crisis-ridden countries, such as Italy, to carry out
painful structural reforms".
The sentiment was the same across the pond.
"Too bad the politicians keep using Mr. Draghi as an excuse
to dodge their responsibility to pass pro-growth reforms," the
Wall Street Journal wrote in an op-ed.
While Draghi has been preaching the gospel of reform for
years, "these never arrive".
Europe's biggest economic stumbling block is its political
class, which refuses to face structural obstacles to growth such
as high taxes, too much business regulation, and a rigid labor
market, the American paper went on.
In Germany, opinion-makers were unanimous that Draghi is
treading on thin ice.
"Draghi must be desperate," wrote conservative paper
Frankfurter Allgemeine Zeitung. The ECB is taking on excessive
risk in order to prop up shaky economies such as those of France
and Italy, which unlike Spain, have put off making key social
and labor reforms, the paper opined.
Draghi "is playing with fire", wrote liberal German paper
Sueddeutsche Zeitung, going on to say that his rate cuts are
purely "symbolic".
While "emergencies engender creativity, not all inventions
are reasonable", the Bavarian paper wrote.
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