Mario Draghi, the president of the European Central Bank, was not all gloom and doom on Thursday, though the man has every right to be given this week’s dismal stream of economic data.Only the day before the ECB’s monthly rate-setting meeting, the European Commission dropped its estimates for euro zone growth to a mere 0.1 per cent next year, against its previous forecast for 1 per cent growth, and said that Germany, Europe’s economic powerhouse, will expand by only 0.8 per cent.
German factory orders and industrial production are falling alarmingly fast. And the economies of Spain and Greece continue to sink, with the chances of a Spanish bailout rising by the day as the jobless rate climbs and growth remains deep in negative territory.
Yet in response to a question during the press conference about the euro zone’s ability to emerge from its vat of mud, he seemed surprisingly optimistic, which made some of us wonder whether he had been infected by Barack Obama’s cheery victory speech, which made Americans think that ambition, fairness and hard work would make anything possible.
Certainly the worst is over, he said, for the euro zone as a whole and its 17 member countries. “I would not have made this statement a year ago,” he said. “Both have a fundamental position which is way more balanced than the U.S. but also other countries – Japan and the UK . The euro has a current account balance, which is basically in balance, corporate debt and household debt is relatively low all over the euro area, savings ratios are high, unit labor costs are down.”
Read more: Upbeat Draghi looks beyond euro zone indicators - The Globe and Mail
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