ECB’s Draghi Plays His Last Card to Stave Off Deflation

The European Central Bank’s Mario Draghi falls foul of the Germans

by Ambrose Evans-Pritchard

The European Central Bank has pulled out all the stops to avert a dangerous deflation-trap, launching a blast of triple stimulus despite angry criticism from Germany that it is entirely unnecessary and will do more harm than good.

The markets reacted wildly to the package of measures, surging at first and then plummeting on creeping fears that the bank has exhausted its policy options and may be defenceless against a fresh shock.

Mario Draghi, the ECB’s president, no longer seems able to conjure confidence with his former panache. His magic has, for now, deserted him.

The ECB cut the deposit rate by 10 basis points to a historic low of -0.4pc and stepped up the pace of quantitative easing (QE) from €60bn to €80bn a month.

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