Draghi: Risks to Euro’s Economic Recovery are Increasing

Mario Draghi said risks to the euro area’s economic recovery are increasing because of conflicts such as the Ukraine crisis.

“Heightened geopolitical risks, as well as developments in emerging-market economies and global financial markets, may have the potential to affect economic conditions negatively,” the European Central Bank president told reporters in Frankfurt today after policy makers kept interest rates unchanged. “We are strongly determined to safeguard the firm anchoring of inflation expectations over the medium to long term.”

Russia’s territorial dispute with Ukraine has led to the worst standoff between Russia and the U.S. and its allies since the Cold War, strengthening headwinds for the 18-nation currency bloc as growth shows signs of faltering. Draghi has in the past said an external shock to the economy that endangers the inflation (ECCPEMUY) outlook could be a trigger for broad-based asset purchases, or quantitative easing.

Bloomberg

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