“The ECB has Delivered” (A Depression)
I liked the heading used in Draghi’s speech this week
Five years of monetary policy – the ECB has delivered
In the last five years, the ECB has continued to take the necessary measures with a view to maintaining price stability in the euro area.
The narrative for 2011 is fun:
Initially, while the economic impact of the sovereign debt crisis was limited and largely confined to vulnerable economies, the rapid global recovery put upside pressure on energy prices. This drove up inflation also in the euro area. We decided to raise interest rates in early 2011 given upside risks to the medium term inflation outlook stemming from energy prices and from ample monetary liquidity.
So you raised rates to fight an energy supply shock and “ample monetary liquidity”. How did that work out?
However, the sovereign debt crisis deepened and the euro area entered a second recession.
Oh. “However” is a bit out of place, don’t you think? “Naturally” would work better. We raised interest rates and naturally the Euro area then entered a second recession.
The inflationary pressures that had emerged before receded.
What a relief, bonuses all round, job well done.