The French president wants to move to Europe more growth. The ECB will give a boost to its next meeting on June 5.
Mario Draghi, the ECB president, had to calm anxiety about the future of the euro area with the promise that his institution "do everything" to save the single currency. © Arne Dedert / AP Photo
By MARC VIGNAUD
Two years after the beginning of his term, Hollande promised once again Monday night during his speech recorded and broadcast on television : he will fight ' to reorient Europe . Understanding towards less austerity and more growth.
A new promise that sounds like an admission of failure : his plan to 120.000.000.000 € announced with a lot of trumpets in 2012 in exchange for the signing of the tax treaty negotiated by Nicolas Sarkozy and Angela Merkel was not enough to revive the economy European Union. Families and French companies , themselves , have seen tax increases . The informal dinner scheduled for Tuesday evening with his counterparts in Brussels has allowed a leader weakened by the results of the European elections to succeed where he failed was there two years ? François Hollande probably secretly crossed my fingers waiting for the cavalry to Frankfurt to come to his aid, including lowering the euro.
The value of the euro , a deflationary element
Faced with the risk of deflation in the euro zone , the European Central Bank ( ECB) gives more signs of wanting to speak at the next meeting of the Board of Governors, June 5
The president of the institute, the Italian Mario Draghi, now clarifies that the exchange rate of the euro is a "serious concern," because it weighs on prices. According to calculations by the ECB , an increase of 10 % of the actual costs of change in average 0.5 percentage points to inflation in the euro area .
I must say that the exchange rate is one of the few levers that the central bank may act to meet its goal of increasing prices of below but close to 2% , as required by his office. It may, in fact , do something against the other two main causes of the slowdown in price increases : the low price of imported raw materials (eg oil), and the downward pressure on labor costs in developing countries Southern Europe, in addition to two factors rather positive for the European economy . Other than running the risk of seeing prices fall and cause the entire economy into a downward spiral in which families would begin to anticipate the waltz labels down , could delay their purchases of durable goods, which suppress the activity of enterprises , wages and further increase in unemployment , the ECB must act indirectly on the exchange rate, although it is not formally a goal of monetary policy. It remains to be seen whether the actions planned by the ECB will be sufficient to keep the euro at its current price of $ 1.36 which is based on the trajectory of the French tax from 2015 to 2017 .
Deposit rates negative , an unprecedented move for a major central bank
Many observers expect to see the Governing Council of the ECB decided to lower interest rates by the ECB , with the setting of " deposit rate " is negative, the first in the history of the major central banks. It is as if a bank has started asking its customers to pay a higher rate of interest to enable them to deposit money into your checking account. Logically , this should encourage banks to lend to households and businesses rather than submit to the trunk of the ECB or the exchange currency markets against another currency , which would tend to push down euro . Except for some time , banks have less surpluses to position the ECB , as they have amply repaid the money - and must repay finish - liquidity provided by the ECB in late 2011 - early 2012 's ' By the end of February 2015.
The ' effect on the exchange rate of the euro could therefore disappoint the French Government, provided that such a measure has already been more or less expected by the market, the euro fell to around $ 1.36 , after flirting with 1.40 dollars. Across the street, several structural factors support the course of the single currency , as an area of global trade surplus with the rest of the world and the return of investor confidence in the sovereign debt of the peripheral countries .
Restart Loans in South
For specialists in the U.S. investment bank Goldman Sachs, interest rate cuts , " are likely to be accompanied by other measures to relax ," but " remain controversial (and therefore uncertain) . " According to reliable sources , it is considering the purchase of loans to firms securitized issued by banks to restart lending , particularly in the south. But the effects of such a measure would be limited , as the market for securitization of corporate loans in Europe is small.
The ' ultimate impact on European growth will depend on how they will be presented by Mario Draghi . If they appear as a step on the way to a policy of massive asset purchases to how the U.S. central bank , then the psychological effect will be stronger.
No miracle waiting
Except that, for the time being , the ECB does not yet seem ready to embark on an extensive program of redemption of public debt as the United States , especially as the Bundesbank, the German central bank is opposed . According to specialists of Natixis , the ECB published its latest " bazooka " if household consumption and business investment in the euro zone were to fail even more , or if an external shock would further reduce a just over the price of raw materials. That said economist Nouriel Roubini , who claimed a share repurchase program of public debt , the ECB " is always a delay. "