The implications of ECB President Mario Draghi’s comments at the annual Jackson Hole gathering of central bankers contained a more startling implication than many initially recognized. Escaping from recession and avoiding a eurozone breakup will require ECB-financed fiscal stimulus.
LONDON – European Central Bank President Mario Draghi’s recent speech at the annual gathering of central bankers in Jackson Hole, Wyoming, has excited great interest, but the implication of his remarks is even more startling than many initially recognized. If a eurozone breakup is to be avoided, escaping from continued recession will require increased fiscal deficits financed with ECB money. The only question is how openly that reality will be admitted.
LONDON – European Central Bank President Mario Draghi’s recent speech at the annual gathering of central bankers in Jackson Hole, Wyoming, has excited great interest, but the implication of his remarks is even more startling than many initially recognized. If a eurozone breakup is to be avoided, escaping from continued recession will require increased fiscal deficits financed with ECB money. The only question is how openly that reality will be admitted.