Italian economist and former Goldman Sachs Group Inc (NYSE: GS) banker turned European Central Bank President Mario Draghi held his last press conference Thursday as he prepares to leave the position Oct. 31 after eight tumultuous years at the ECB.
European leaders have nominated former International Monetary Fund managing director Christine Lagarde as the ECB's next president.
At the October ECB meeting, officials left the key interest rate at negative 0.5% and pointed to further signs of an economic slowdown. The ECB is looking to stabilize the eurozone economy, which has been experiencing a slowdown due to international trade tensions between the U.S. and China and Brexit.
German Economy Flails
Germany is Europe’s largest economy, and it is teetering on the edge of contraction with growth slowing across the eurozone.
Figures released Thursday show employment in Germany’s private sector fell for the first time in six years in October.
Markit’s flash Purchasing Managers’ Index (PMI) survey has shown a fall in employment in Germany that is mainly the result of job losses in the manufacturing sector.
On Thursday, Draghi praised Germany’s nominee for the executive board, Isabel Schnabel, as an excellent economist who would enhance discussions at the bank.
“Isabel is an excellent economist ... she has all the capacities to do very, very well — enhance the discussions, outside, inside the ECB, actively participate in the work of the ECB — so we should welcome her appointment very warmly,” he said.
Draghi's 2012 "whatever it takes" comment will go down in history as a turning point in the European financial crisis, said Artur Baluszynski, head of research at Henderson Rowe.
“For many, especially those in the financial services industry, the first half of Mario’s term was a big success. However, the second half of his tenure will most likely be remembered as a string of failed attempts to reflate the Eurozone."
Despite a series of extraordinary measures over the last four years, eurozone inflation has failed to reach the ECB's target, he said.
"The truth is that there are many external deflationary forces outside of the ECB’s control. The sooner the EZ’s political elite, especially in Germany, accept this fact, the better chance there is for a real recovery for the bloc and its banking system,” Baluszynski said.
The Vanguard FTSE Europe ETF (NYSE: VGK) was trading slightly positive at the time of publication.
ECB Restarts Quantitative Easing, Cuts Deposit Rate By 10 Basis Points
European Parliament photo via Wikimedia.
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