Mario Draghihates done again. Shortly before his departure, he lets it crash again - and slips into his parade role again: the savior. He can do that well, he has done so successfully for many years. And that he can not be disturbed by the many critics in the ECB Council, such as Bundesbank President Jens Weidmann, no matter how loud they are, that's almost routine. One is not green at all in such a neurotic way that it is almost always nice.
This time, the President of the European Central Bank has implemented a major program. It has two main elements: the negative interest rates on deposits of the banks are once again lowered, although leading bankers rushed against it; and the program to buy European government bonds comes back to life, though it was most recently ended by Draghi himself. The new program starts in November and has no end date. That sounds like: buying government bonds forever.
At the same time he sent in the press conference after the decision, a message in the world, which seems paradoxical given the size of his blitz program. As loud as he never said: The governments have to go now. On several occasions he called on European politicians to finally accept the economic problems of their countries and Europe.
According to Draghi's interpretation, this means that whoever has the opportunity to do so should now spend money and the economic push. In particular, countries with low debt levels should be addressed. Later, he also explicitly advised Germany to spend more. And when asked whether he wanted to send a message to Europe's governments today, he replied, "Yes!"
Mario Draghi ignited a fireworks display. And then explained that it was just a sparkler andalle, who were looking for real blast, should check the governments. Paradoxer is hardly.
With this behavior Mario Draghi shows: As big as the program is, it is above all a desperate act. It is completely unclear how much the ECB can achieve at all. The bank's own resources, which carried the euro area through crises with ever-wilder programs for so long, are no longer working very well. On the one hand, there are negative side effects, which are becoming increasingly apparent: banks and savers complain about the negative interest rates, some real estate markets (such as in German cities) overheat, on the sovereign bond markets it is unclear whether they are still markets, such a large proportion of bonds is at the ECB. Besides, there are many more fundamental doubts about the policy of cheap money. Economists have been asking themselves for some time: Could it be that it no longer works? That the markets and people got used to them and therefore react differently? Some economists even suggest that the expansionary monetary policy meanwhile does the opposite of what it should do: that it slows down the economy instead of pushing it.
How about restraint?
The conditions in the money world have changed so much in recent years that perhaps a completely different approach would be necessary: a more restrained one. The danger, if the ECB continues now, is that it lays the foundation for the next crisis. Or, in the best case, that it does not do much good, but it cuts down whole markets in an easy way. And although the ECB president senses that he can not be the savior this time, he still tries.
One thing is certain: Mario Draghi's appeal to governments would be much more urgent and effective if he did not dare to make the big bang at the same time. He worried only that the policy leans back further. The politicians weigh in the belief that they can continue as before. They do not need to tackle the economic difficulties of their countries and hope for the ECB, which somehow addresses it.
That's wrong. Now, really, it's the governments and businesses that are doing it. There is much to do in economic policy. Especially in Germany it fell in the past years in the deep sleep. Or can anyone still name a few well-known politicians? By the way, what has to be done is not primarily about more debt. But first of all, with decisions made, bureaucracy cut down, and a reasonable plan for more investment to be presented. At the latest in the face of the looming recession, it's time for the government to wake up. To achieve that, the ECB president has unfortunately just chosen the completely wrong means.