FRANKFURT (dpa-AFX) – ECB President Mario Draghi has eased fears of a slowdown in growth despite Italy's debt crisis, Brexit turmoil and disappointing economic data. "There is certainly no reason for growth to come to an abrupt end in the eurozone," he told reporters on Friday at a banking conference in Frankfurt. However, the ECB president, very controversial in Germany because of his zero interest rate policy, sees no reason for politicians to rest.
– on the contrary. Once again, he called for uniform rules for banks and capital markets.
"The completion of the banking union in all its dimensions, including risk mitigation, and the launch of the Capital Markets Union by the implementation of all initiatives in progress by 2019 are now as urgent as the first steps in managing the currency crisis in the euro area seven years ago, "he said. In a Capital Markets Union, the best answer lies in the threats to the monetary union. "There is only one answer to that: more Europe".
Deutsche Bank boss Christian Sewing sees this as an outgoing Draghi for next year. "One of the main reasons why Europe is behind it is fragmentation," Sewing said. "US banks have a huge domestic market, while European banks deal with 27 or 28 domestic markets with inconsistent regulations and different structures." Therefore, the banking union needs to be accelerated and the concept of a Capital Markets Union revitalized.
More consistent rules for capital markets have long been on the political agenda of the European Commission. Among other things, the Capital Markets Union seeks to open new sources of financing for companies, reduce the cost of raising capital and increase the number of savers in the EU.
In addition, cross-border investments should be facilitated and more foreign investment attracted. Overall, the EU financial system is expected to become more stable, resilient and competitive. However, the objectives summarized in an action plan of the Commission are still far away. As before, the requirements for capital market transactions are highly fragmented and mainly national.
As for the economy, Mr Draghi said that a gradual slowdown in growth was normal if the business cycle developed and growth approached its long-term potential. However, the growth phase in the euro area is still relatively short and small.
Since 1975, economic downturns in the euro area have averaged a little under eight years, with economic output up 21 percent, Draghi said. On the other hand, the current recovery will only last five and a half years, with an economic power gain of 10%. / Bgf / zb / DP / jkr