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WORLD NEWS Thursday 20 June 2019

Draghi's "whatever it takes" a tough act to follow

FRANKFURT, Germany (AP) preserve the euro. And be-
— European Central Bank lieve me, it will be enough."
head Mario Draghi is cred- The utterance proved to be
ited with saving the euro by a turning point for Europe.
using new and sometimes The ECB followed up with a
unorthodox policy tools. plan to purchase the gov-
The question now is, will the ernment bonds of coun-
next ECB president be as tries experiencing borrow-
quick to use them - or in- ing costs that were out of
vent new ones - as Draghi line with the ECB's efforts
has been? to steer interest rates in the
European leaders are eurozone. Market panic
searching for a replace- around Italy subsided. The
ment for the 71-year-old program survived court
Draghi, whose term expires challenges from oppo-
Oct. 31. But whether candi- nents who said the ECB ex-
dates share his pragmatic ceeded its powers.
and activist approach is As the eurozone slowly re-
not the only consideration: covered, Draghi and the
Picking the ECB president is bank's governing coun-
also part of complex horse cil backed other innova-
trading among govern- tions to push up alarmingly
ments over top EU jobs. weak inflation that threat-
Their choice will determine ened the eurozone with
whether the next ECB lead- In this Thursday, May 16, 2019 file photo, European Central Bank President Mario Draghi arrives for crippling deflation. Under
er will be someone that is a meeting of Eurogroup Finance Ministers at the European Council headquarters in Brussels. Draghi, the bank used the
as ready to step up in a cri- Associated Press unorthodox tool of nega-
sis, and as willing as Draghi tive interest rates, putting a
was to innovate and resist In Weidmann's favor is the state and government. The Berenberg bank in London. minus 0.4% rate on deposits
criticism. European leaders fact that Germany has thinking goes that Germa- "Draghi has steered the left at the central bank by
meeting Thursday and Fri- never held the ECB presi- ny and France cannot hold eurozone through a tre- commercial banks, a pen-
day will discuss top Europe- dency since the euro was both the commission and mendously difficult time, alty to push them to lend.
an Union jobs, though they launched in 1999. He is a the ECB job; that means through a much bigger Lastly, the bank bought 2.6
may not yet reach a deal stimulus skeptic, however, that if a German such storm than anyone could trillion euros ($2.9 trillion)
on any of them. and may face opposition as European parliament have imagined," Schmied- in government and cor-
Speculation so far has fo- from indebted countries member Manfred Weber is ing said. "He made sure porate bonds across the
cused on Jens Weidmann, such as Italy that have chosen for the commission, that the ECB rose to the eurozone over almost four
head of Germany's Bundes- benefited from Draghi's Weidman's chances at the unforeseen challenge, in years, a move that pumps
bank national central bank stimulus. All the candidates ECB would suffer and Ville- my view without breaking newly created money into
and an opponent of some have served under Draghi roy de Galhau's would im- or violating the mandate, the banks with the aim of
of Draghi's new measures; on the ECB's rate-setting prove — and vice versa in but under unforeseen cir- supporting lending and a
Francois Villeroy de Gal- council through their posts case of a French commis- cumstances he found new healthier level of inflation.
hau, the head of the Bank as heads of national cen- sion president. tools to help the ECB meet Those tools remain for
of France; former Finnish tral banks. Yet it was the ECB that its mandate." Draghi's successor. The pro-
Central Bank head Erkki Some ECB watchers are stepped up during the Draghi's trademark mo- gram that halted the crisis
Liikanen, and current Finn- disconcerted that the job debt crisis and took quick ment came on July 26, in Italy was opposed, how-
ish central banker Olli Rehn. is being seen as secondary action credited by many 2012, as Italy, the third larg- ever, by Weidmann. He has
Leaders will pick one for an to choosing successors for with keeping the euro from est country in the euro, was argued that buying bonds
eight-year, non-renewable Jean-Claude Juncker, the breaking up. Draghi's will- facing unsustainably high takes the heat off govern-
term in a process that some head of the EU's executive ingness to act was crucial borrowing costs that threat- ments to shape up, and
think risks focusing more on arm, the European Com- during market turmoil that ened its financial stability. that it could unfairly spread
national turf wars than on mission, and for Donald hit the eurozone in 2011- Draghi said that "within our losses to other countries in
the policies the candidate Tusk, president of the Euro- 2012, says Holger Schmied- mandate, the ECB is ready case a country defaults on
would pursue. pean Council of heads of ing, chief economist at to do whatever it takes to bonds held by the ECB. q