FRANKFURT – It was supposed to be the European Central Bank’s first calm meeting in months. President Mario Draghi was to explain how smoothly the bank’s stimulus program was going.
But just as he began his press conference, a protester startled participants by running from the first row of seats and leaping onto the table in front of him. She hurled what appeared to be confetti and screamed, “End the ECB dictatorship!”
Security guards dragged her off the stage in seconds and took Draghi into a side room.
Draghi returned minutes later looking a little shaken but resumed his statement and then answered questions for an hour, at the end earning a small round of applause from the press corps for his composure. An ECB statement said “the activist registered as a journalist for a news organization she does not represent.”
The bank said she went through a metal detector and x-ray of her bag before entering.
Some left-wing activists have accused the ECB of enforcing budget austerity measures on eurozone countries, such as Greece, that are under financial bailout programs. EU leaders have also been criticized for appointing too few women to its top leadership positions.
Draghi, who didn’t comment on the disruption, said in his statement that the bank was determined to pursue its existing bond-buying 1.1 trillion euro ($1.2 trillion) stimulus program “until the end of September 2016 and, in any case, until we see a sustained adjustment in the path of inflation.” Inflation at minus 0.1 per cent is way below the ECB’s aim of 2 per cent, and a sign of a weak economy.
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There was some speculation that because of recent improvement in economic indicators in the 19-country eurozone the ECB might end its stimulus program before that date.
Draghi was at pains to firmly quash any such talk.
He used an analogy to running, saying it was “like asking after the first K, are we going to finish this marathon?” K is runner’s jargon for kilometre; a marathon is just over 42 kilometres, or 26.2 miles.
Draghi also urged eurozone governments to get busy with long-term reforms to make their countries more business-friendly and promote growth. “Reforms and actions to improve the business environment for firms need to gain momentum in several countries,” he said.
In response to a question from a youth group in attendance about Europe’s high rate of youth unemployment, Draghi said the time was long overdue to end a two-track system that sees young people bearing the brunt of layoffs and downturns. “The present situation of the labour market is something that should be overcome, should have been overcome many years ago,” he said.
The jobless rate for the entire eurozone is 11.3 per cent, but for under-25s it is 51.7 per cent in Greece, 50.2 per cent in Spain, and 42.6 per cent in Italy. Worker protections are often skewed toward older, established members of the labour force, leaving younger people with diminished chances.
The ECB is buying 60 billion euros in government and corporate bonds using newly created money. Increasing the supply of money in the economy can raise inflation. The stimulus is also lowering market borrowing rates, which tends to boost lending and, by extension, economic activity. The U.S. Federal Reserve, Bank of England and Bank of Japan have also used bond purchases, or quantitative easing, in this way.
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