The ECB finds the economy as robust

The Governing Council of the ECB is confident about the developments in the economic situation, as President Mario Draghi underlined to the media on Thursday after the meeting of the Turning board. (Image: Ronald Wittek / EPA)

The European Central Bank (ECB) remains on its own path. One of the reasons is the robust economic situation in the euro area. The Board of Governors is also optimistic about economic development, as President Mario Draghi stressed on Thursday after the meeting of the Council. Despite significant uncertainties surrounding the global trading environment, the ECB sees the euro area economy on a solid and broad growth path. The underlying strength of the economy confirms the fact that the Governing Council has confidence in the fact that inflation in the euro area will evolve towards the goal of the lower ECB, but close to 2 %. This is true even if the central bank's asset purchases are gradually reduced as expected.

As expected, Draghi confirmed that the ECB intended to continue its quantitative easing at the current level of 30 billion euros per month by the end of September. From this, the volume of purchases is expected to fall to 15 billion euros per month by the end of December. Then the ECB 's buying program comes to an end and the monetary authority will issue securities totaling around 2.6 trillion euros. €, of which 2 organic. € on the government bonds of euro zone countries. However, the exit will be completed only if economic conditions do not change significantly by then.

After the end of quantitative easing, the ECB intends to fully reinvest the amounts due by maturing bonds. For the first time, Draghi stressed at the press conference that the key to capital reinvestment would remain an important factor. The ECB buys bonds on the basis of the share capital of national central banks in the capital of the ECB. The Bundesbank holds a share of almost 26%, which means that the ECB buys about 26% of its shares in Germany under the purchase program. According to Draghi, reinvestment issues were not discussed at the meeting.

According to the ECB, key interest rates should remain at the current level for the foreseeable future. The interest rate (principal rate of refinancing) remains at 0%, the marginal lending facility rate at 0.25% and the deposit facility rate, also known as the penalty rate for banks, at -0.4%

. The United States and the EU as well as other countries have expressed Draghi only very cautiously. It would be a good sign that there was a willingness to discern trade issues multilaterally, said the ECB President. His words showed that he is currently aware of a trade dispute, but not a trade war.