FRankfurt / Main (AP) – ECB President Mario Draghi has dampened the fear of a decline in growth despite the debt crisis in Italy, the Brexitur bullet and recent weak data. "There is no reason why growth in the euro area should end suddenly," he said.
However, the ECB president, who is very controversial in Germany because of his zero interest rate policy, sees no reason for politicians to rest – on the contrary. Again, he asked for uniform rules for banks and capital markets.
"The completion of the Banking Union in all its dimensions, including risk reduction and the launch of Capital Markets Union through the implementation of all ongoing initiatives by 2019, is now as urgent as the first steps in crisis management in the euro area seven years ago." In a capital market union is the best answer to the threats facing the monetary union. "There is only one answer: More Europe."
Deutsche Bank's chief Christian Sewing sees this as the outgoing Draghi in the coming year. "One of the main reasons Europe is behind is fragmentation," said it. "US banks have a huge home market, while European banks manage 27 or 28 national markets with inconsistent regulation and different structures." Therefore, the banking association needs to be accelerated and the concept of a capital market union revived.
More consistent capital market rules have long been on the Commission's political agenda. The purpose of the capital market union is to open up new sources of funding for companies, reduce the cost of capital procurement and increase the range of savers throughout the EU.
In addition, cross-border investment should be facilitated and more foreign investment attracted. Overall, the EU's financial system should become more stable, resilient and competitive. However, the objectives summarized in a Commission Action Plan are still far from. As before, the requirements for capital market transactions are very fragmented and predominantly national.
Regarding the economy, Draghi said that a gradual slowdown in growth is normal when the business cycle disappears and growth is approaching its long-term potential. However, the growth phase in the euro area is still relatively short and in size.
Since 1975, the economic recovery in the euro area has averaged just under eight years and has increased economic production by 21 percent, said Draghi. On the other hand, the current upturn will only take five and a half years, with an increase of 10 percent in economic power.