Following up from our previous post, both the Fed meeting and the Presidential debrief were “Closed to Press” so we are all none the wiser except to say that central bank activity is “hotting” up and we can expect more of the unexpected, despite “guidance” to the contrary.
In Germany, Schauble has blamed the ECB’s cheap money policy of fomenting the rise of the anti-EU AfD party, which now polls at 14%. In Germany’s proportional voting system, a party needs at least 5% to be allocated seats.
“The ECB’s policy was already unpopular in Germany and the idea of helicopter money was the straw that broke the camel’s back,” said Joerg Kraemer, an economist with Commerzbank in Frankfurt. “People feel that ideas like this are dangerous.”
While one can debate how much of Germany’s public stance is posturing, the tide is clearing turning against Draghi in Europe’s most prosperous and powerful nation. And as Reuters adds, this weekend’s scandal marked a new low in the often fraught relations between the euro zone’s biggest country and the central bank’s Italian chief, who has recently bemoaned what he described as the “nein zu allem” – “no to everything” approach – a deliberate swipe at Germany.
The combatants will have a chance to settle their differences or continue to beg to differ at the IMF’s spring conference in Washington later this week and then on the 20th at the meeting of the 19 eurozone central bankers. We live in interesting times.
Previously at the “View” – Hold the front page