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ECB incentives

The ECB incentives are still needed to promote wages growth and inflation

The recovery in the Eurozone is stable, but the European Central Bank (ECB) must continue to provide liquidity to help raising wages, according to the President of the ECB, Mario Draghi.

“The labor market improvements, which we are observing, still need time to turn into a more dynamic wage growth”, said Mario Draghi. “The recalibration of our post-year policies aims to maintain the level of monetary incentives that is still needed to ensure a sustained return to inflation”, added he.

According to Draghi, Eurozone officials will have to wait to feel reimbursed and paid. “Many of those who suffered from painful job losses during the crisis are now finding work”, added he.

He pointed out that in 16 of the 19 Eurozone countries has a positive annual employment growth from mid-2014. At 8.9%, the unemployment rate in the Eurozone is the lowest since January 2009. However, many of the workers would like to work more, and some who are out of the labor market are discouraged and are no longer looking for work.

Mario Draghi also pointed out that there can not be a single European Deposit Guarantee Scheme unless the problem of bad credit in Italy and other southern European countries is solved.

“Unsecured loans and the single European Deposit Guarantee Scheme are interconnected”, the ECB president said. “The risk reduction and risk sharing also have to go in parallel, and bad loans are part of that”, added Mario Draghi.

About Manuel Fajardo

Manuel Fajardo is from Brazil, living in Porto Alegre. He works in Finance Apprise Journal, as analysts and content writer. In my responsibilities are finance and business news for Latin America, Asia and Australia.

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