HomeLive CommentsECB Draghi: Fiscal and monetary policy together would lead to faster return...

ECB Draghi: Fiscal and monetary policy together would lead to faster return to price stability

Outgoing ECB President Mario Draghi called for euroarea-wide fiscal stimulus aimed at boosting investment. He said yesterday in Athens “fiscal policy playing a more supportive role alongside monetary policy would lead to a faster return to price stability and therefore fewer side effects.”

And, “fiscal policy becomes more powerful when monetary policy is close to the effective lower bound, as the multipliers are higher.” “Supportive fiscal policy can complement monetary policy in cutting through the obstacles that are weighing on demand — which is the case in the euro area today”.

He added, “if fiscal and structural policies also play their role in parallel — and more so than we see today — the side effects of monetary policy will be less, and the return to higher rates of interest will be faster.”

Featured Analysis

Learn Forex Trading