Trump hits European Central Bank president for 'unfairly' competing against the US

Lloyd Doyle
June 18, 2019

Mario Draghi, President of the European Central Bank (ECB), attends a news conference in Vilnius, Lithuania June 6, 2019. They have been getting away with this for years, along with China and others, ' Trump wrote.

The ECB president set the tone for the institution's annual forum in Sintra, Portugal, by saying that if the outlook doesn't improve, and inflation doesn't strengthen, "additional stimulus will be required".

The Federal Reserve, which raises or lowers interest rates to slow down or stimulate the economy, is an independent agency that needs no presidential or congressional approval to raise or lower the rates.

With just four months of his eight-year term left, the slowdown in the eurozone may threaten to unpick Draghi's legacy. The Italian's promise in 2012 to do "whatever it takes" to save the euro is widely credited with holding together the currency bloc during the darkest days of its sovereign debt crisis.

"Mario Draghi just announced more stimulus could come, which immediately dropped the euro against the dollar, making it unfairly easier for them to compete against the USA", Trump tweeted on Tuesday.

The president's complaint against the European Central Bank echoed complaints he's made about China and Mexico - two countries he's threatened to get in trade wars with because of his belief the at a competitive disadvantage with them.

Trump's allegation adds a potentially contentious issue for a summit next week of leaders who preside over more than three-quarters of the global economy.

The ECB has an inflation target of 2.0 percent. He noted that the European Central Bank can amend its forward guidance, that rate cuts remain "part of our tools" and asset purchases are also an option.

In a sign that discussions on policy action are becoming more formal within the ECB, Draghi said the Governing Council will in the coming weeks review how their tools can be used to tackle risks to price stability. Market indicators show investors believe the Fed will need to cut interest rates up to three times this year to juice the price level back towards its target.

Mario Draghi also dismissed market concerns that asset purchases lacked potency as the European Central Bank was coming up against its self-imposed limits, including a rule that prevents the European Central Bank from buying more than one-third of a particular country's debt.

"We are committed, and are not resigned to having a low rate of inflation forever or even for now", Draghi said.

Other reports by Iphone Fresh

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