The Blog

Draghi, The Politicians and Rex Kwan Do

Posted on June 18, 2016

Draghi, The Politicians and Rex Kwan Do

Posted on June 18, 2016

Bloomberg reported on the speech1 the ECB chairman Mario Draghi gave on June 9th asking that politicians start to help the Eurozone central banks by implementing more fiscal reform.
 
The problem is that monetary policy is out-of-whack with the differing fiscal policies across the 17 Eurozone nations.  Most understand that politicians depend on votes haven't done the responsible thing to create structural reforms because they're unpopular and hence hinder the politician’s re-election.
 
Draghi' remarks were a push for help.
 
He knows that monetary policy alone hasn't worked and demand isn't picking up nor inflation in the Eurozone thus, today's remarks were an invitation to get politicians to create reforms on fiscal policy, etc. to enable the economic engine to run a bit more smoothly rather than sputter along as it has the last few years.
 
I see this as the beginning of something larger. I think sooner or later the reset button in one way, shape or form will be pushed whether by civil vote among politicians or civil unrest and rioting by Eurozone countries.
 
Britain is already taking a vote in two weeks whether or not to stay in the Eurozone and Germany has been trying to negotiate with the IMF to get involved in backing the bailout packages for Greece.
 
The ECB needs help from politicians and their push for fiscal reform but so far the politicians have taken a lesson from Rex:


Jos. G. Sellery
Source:
1
http://www.bloomberg.com/news/articles/2016-06-09/draghi-says-economic-cost-of-delaying-reforms-too-high-to-ignore?bcomANews=true