Mario Draghi seemed certain to leave office to gushing tributes. Instead, his critics are out in force
ago it was hard to find anyone with a bad word to say about Mario Draghi, the Italian boss of the European Central Bank . He is credited with saving the euro by pledging, in the depths of a crisis in 2012, to do “whatever it takes” to stop the currency from breaking up. He seemed certain to leave office at the end of October to gushing tributes and an assured place in the pantheon of Europe’s great leaders. Instead, his critics are out in force.
Their fury was aroused by the stimulus package Mr Draghi unveiled on September 12th, which included cutting interest rates from -0.4% to -0.5% and resuming quantitative easing , the purchase of bonds with newly created money. In the hope of reviving inflation, thehas pledged to keep rates low and continue buying bonds until underlying inflation returns to its target of “close to, but below, 2%”.
Teutonic toughness was necessary to tame high inflation in the 1970s and 1980s. But that world is gone. Inflation has exceeded 2% in only 29 of the past 120 months; core inflation, not once. In this environment the memo’s worry that thesymmetrical target might stoke runaway inflation seems absurd. It confirms what Mr Draghi told theon September 30th: that he inherited a “very conservative” institution. This rankles with old-timers, but it is true.
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