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| EZB-president Mario Draghi (center) announces decisions of the EZB-council (Source: Thomas Seidel) |
Before the summer break, there are no
sensations in terms of Euro. The excitement of the hour take place
especially on the other side of the Atlantic. However, a careless
question about to the critics of the Target 2 balances, leads to cut
someone short.
In its last session before this year's
summer break, the ECB actually decided not to decide. In any case,
the central bank interest rates and the terms of the extraordinary
purchase program have remained unchanged. One did not expect anything
else. The economic basis for this non-decision has not changed
either. The key figures for overall economic development in the euro
area have largely remained the same. Sustained economic growth,
declining unemployment and at least non-increasing government costs
in the social sector, as well as a moderate but not exactly definable
inflation represent by and large the current situation. Ireland,
Portugal, Spain and Greece are on a positive path, only the unclear
development in Italy gives reason for thought.
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| The shimmering heat fills the air at Frankfurt am Main View at the new Henninger Tower from the EZB building (Source: Thomas Seidel) |
With so much summery sunshine in
Europe, the discussion is therefore more focused on secondary
locations. One of them is the current trade dispute that the US has
not only instigated with Europe. After all, according to Mario
Draghi, the negotiations are a good sign for multilateral talks. The
Governing Council do see a certain weakening in the extraordinary
export growth of recent years. However, other indicators such as
investment and private consumption would continue to show positive
development.
Given a certain tiredness at 37 degrees
Celsius summer heat outside the ECB press center, a request due to
the German permanent critics of Target 2 balances acts, first seems
to be a gap filler for a lame press conference. But Mario Draghi
takes up this topic about constantly nagging critics on the German
Target 2 balances to put someone in his place. First, Draghi explains
the situation. Target is a payment system and every central bank
system needs a system to handle transactions. Such a system, however,
poses no risk in itself. The remaining high balances in some of the
central banks of the euro system are mainly caused by the purchase
program of the ECB itself. Then Draghi concludes with the remark,
that those criticising the target balances, are people who do not
like the Euro itself.
Conclusion
Certainly in Germany the criticism of
the euro will not be silenced. The longing for the "good old
German Mark" is just as unreal as the desire many British Brexit
advocates for the "good old imperial times". Both will not
come again. Other Europeans, of course, should refrain from any
criticism of the Euro. Remember, no one at the end of the 1990s was
ready at last to make faster swaps of their old useless national
currencies, than the Belgians, French and above all the Italians.
