Single Currency Remains Strong, ECB Chief Draghi Insists
The president of the European Central Bank, Mario Draghi, has brushed aside concerns over a new Euro crisis caused by the political upheaval in Italy to insist that the currency remains strong.
Draghi told a press conference in Riga, where he attended a meeting of the ECB Governing Council, that his trust in the single currency remained firm despite speculation about a Euro meltdown triggered by the Italians.
He said: “The euro is the currency of 340 million people and enjoys the support of 74 per cent of citizens across the euro area. And more countries want to join the euro today.”
Draghi added: “You can draw your own conclusions, but one of these conclusions is that the Euro is irreversible because it is strong, because people want it and because it is of no benefit to anybody to discuss its existence.”
There are fears among investors that the new right-wing Italian government may move to leave the single currency, even though senior members of the administration have pledged their commitment to the single currency.
Draghi, who was governor of the Bank of Italy from 2006-11, said: “We should not overdramatise policy changes.”
After a run of poor performances, the value of the Euro rallied after Draghi’s upbeat comments and his subsequent confirmation that the ECB’s quantitive-easing programme would be phased out this year, enjoying its biggest rise since last August at one point.
Draghi also expressed concerns to the European Parliament over the Chinese slow-down and the knock-on effect on emerging markets, warning that contagion could put further strain on the deflationary Eurozone.
He added that it was too early to sign off on any new plan to address these issues, insisting that the ECB needed more time to decide on its response.
(Banner image: European Central Bank )