Mario Draghi and Jens Weidmann are clashing anew over how much more stimulus the ailing euro-area economy needs from the European Central Bank.
As Europe’s woes again proved the chief concern at weekend meetings of the International Monetary Fund in Washington, President Draghi repeated he’s ready to expand the ECB’s balance sheet by as much as 1 trillion euros ($1.3 trillion) to beat back the threat of deflation. Bundesbank head Weidmann responded by saying that a target value isn’t set in stone.
The differences at the heart of European policy making risk leaving the ECB hamstrung as the region’s economy stalls and inflation fades further from its target of just below 2 percent. History suggests Draghi will ultimately prevail over his German colleague.
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