Page 10 - ARUBA TODAY

A10 WORLD NEWS
Friday 14 September 2018
ECB's Draghi: Trade war chief worry for global economy

By DAVID McHUGH ism." U.S. President Donald
Associated Press Trump has imposed tariffs
FRANKFURT, Germany (AP) on aluminum and steel im-
— The European Central ports and on some Chinese
Bank pushed forward Thurs- goods, raising concerns
day with its plan to gradu- about a cycle of retaliation
ally phase out its monetary that could hinder global
stimulus, saying it is confi- trade.
dent in the region's growth. The ECB, like other major
But its president, Mario central banks, is removing
Draghi, warned that the extraordinary support for
United States' trade dispute the economy left over from
with several major powers the Great Recession and
has become a key eco- the eurozone debt crisis of
nomic concern. 2010-2012 that saw several
The chief monetary author- indebted member coun-
ity for the 19 countries that tries bailed out by the other
use the euro confirmed members.
Thursday that its bond-buy- The stimulus withdrawal is
ing stimulus would be cut accompanied by a ca-
to 15 billion euros ($17.4 bil- veat that the bank could
lion) a month from 30 billion change plans in case of
euros after September. an unexpected downturn.
The decision was wide- The President of European Central Bank, Mario Draghi, speaks during a news conference after a That seems unlikely at the
ly expected after being meeting of the ECB governing council in Frankfurt, Germany, Thursday, Sept.13, 2018. moment, though analysts
mapped out in detail at Associated Press say a weakening of growth
could delay the first interest
the bank's June 14 meet- rate rise, which the ECB cur-
ing. The ECB set out its plans rently expects to come no
to halt the stimulus in De- earlier than in the second
cember and postpone any half of 2019.
interest rate increase until The eurozone grew 0.3 per-
well after that. Analysts do cent in the second quarter
not expect a rate hike until over the quarter before,
the second half of 2019 at and the European Com-
the earliest. mission forecasts 2.3 per-
Draghi said at a post-deci- cent growth for the full
sion news conference that year. Unemployment has
the eurozone was seeing fallen to 8.2 percent from
"an on-going, broad-based over 12 percent in 2013 as
expansion." Trouble in mar- the eurozone continues to
kets in emerging markets heal from the Great Reces-
like Argentina and Turkey sion and the debt crisis. The
"so far does not show any recovery remains uneven,
sign of spillover," he said. however, with unemploy-
Asked about concerns that ment at 19.5 percent in
Italy's new populist gov- Greece and 15.1 percent
ernment will break with in Spain.
Europe's rules on public The ECB's stimulus exit is
spending and rekindle a part of a global trend: the
debt crisis in the region, withdrawal of stimulus from
he said that top officials the rich world's major mon-
had given assurances they etary authorities, including
would respect the rules, the U.S. Federal Reserve,
but that there had also the Bank of England and
been conflicting state- the Bank of Japan. They
ments and that the actual loosened monetary policy
budget decisions would be — lowering interest rates
what counts. "Words have and pumping new money
changed many times," he into the financial system—
said. "We are waiting for to support the economy
facts." after the global financial
For now, the questions over crisis that deepened 10
Italy do not seem to be af- years ago with the bank-
fecting other countries, ruptcy of U.S. investment
Draghi noted. "So far, it's bank Lehman Brothers. A
pretty much an Italian epi- crisis over debt in Greece,
sode." Ireland, Portugal, Spain,
The key threat to the global Cyprus and Italy further
economy right now, Draghi held back the 19 countries
said, is "uncertainties re- that use the euro as their
lated to rising protection- currency.q