European Central Bank ‘running out of tools’ to deal with crises across EU

Thursday, July 21, 2016
By Paul Martin

THE Head of the Europe’s central bank is running out of tools to deal with the bloc’s economic woes, an expert warned ahead of an appearance by Mario Draghi later today.

By LANA CLEMENTS
Express.co.uk
Thu, Jul 21, 2016

Investors hope the bank chief will be able to calm rising fears over the eurozone’s financial stability, following Britain’s vote to leave the European Union (EU).

The economic picture for the bloc has darkened since the referendum outcome, which has trigged panic over Italy’s banks, which hold around £270billion of bad loans on their books.

In a bid to smooth the cracks, the European Central Bank (ECB) is now expected to take monetary action in the coming months.

But Mr Draghi is running out of options, after already going to extreme lengths to boost the economy in recent years.

Earlier this year, the ECB pulled out all the stops in a desperate effort to revive growth by implementing negative interest rates and injecting more than a trillion pounds worth of cash into the economy.

Now Mr Draghi will need to pull a rabbit out of the hat to persuade markets that Brexit will not derail the eurozone economy.

BNP Paribas economist Luigi Speranza said. “The burden of responding to the Brexit shock will remain with the ECB, which is all too aware that it has fewer and fewer tools with which to respond.”

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