Careful what you wish for, ECB's Draghi tells eurosceptics

FRANKFURT (Reuters) - Leaving the European Union or the euro currency does not equate to greater sovereignty for the country involved, which would then become hostage to decisions made elsewhere, the head of the European Central Bank Mario Draghi said on Friday.

Reuters February 23, 2019 00:07:09 IST
Careful what you wish for, ECB's Draghi tells eurosceptics

Careful what you wish for ECBs Draghi tells eurosceptics

FRANKFURT (Reuters) - Leaving the European Union or the euro currency does not equate to greater sovereignty for the country involved, which would then become hostage to decisions made elsewhere, the head of the European Central Bank Mario Draghi said on Friday.

With Brexit looming at the of next month and scepticism towards the euro still simmering among the backbenchers of Italy's ruling coalition, Draghi warned about the risks of going it alone.

He said a country leaving the EU would be faced with the choice of either accepting rules made in Brussels to secure access to the single market or severing ties with its largest trading partners.

"Being outside the EU might lead to more policy independence, but not necessarily to greater sovereignty," Draghi said in a lecture in Bologna, Italy. "The same is true of the single currency."

Italy's ruling League party and 5-Star Movement have ditched pre-election ambitions to leave the euro.

But they have attacked the ECB and the Bank of Italy on issues spanning monetary policy, banking supervision and key appointments at the country’s central bank.

Draghi, himself an Italian, said a country leaving the euro zone would still be affected by the "spillovers" of the ECB's monetary policy, as was the case with the Bundesbank before the euro's launch.

"Most countries would no longer benefit from local currency invoicing, which would exacerbate the effects on inflation if they undertook large exchange rate devaluations," Draghi said.

"And they would be more exposed to monetary policy spillovers from abroad – not least from the ECB itself – which could constrain their domestic policy autonomy."

(Reporting By Francesco Canepa, Editing by William Maclean)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Greek police clash with protesters in rally against mandatory vaccinations
World

Greek police clash with protesters in rally against mandatory vaccinations

ATHENS (Reuters) - Greek police used teargas and water cannon to disperse people who had gathered in central Athens on Saturday to protest against mandatory COVID-19 vaccinations. More than 4,000 people rallied outside the Greek parliament for a third time this month to oppose mandatory inoculations for some workers, such as healthcare and nursing staff.

Two Turkish soldiers killed in attack in northern Syria
World

Two Turkish soldiers killed in attack in northern Syria

ISTANBUL (Reuters) - Two Turkish soldiers were killed and two were wounded in an attack on their armoured vehicle in northern Syria, and Turkish forces immediately launched retaliatory fire, Turkey's defence ministry said on Saturday. "Our punitive fire against terrorist positions is continuing," the statement on Twitter on said. It did not specify where the attack occurred, but media reports said it was in the al-Bab area.

Brazilians take to streets again to demand Bolsonaro's impeachment
World

Brazilians take to streets again to demand Bolsonaro's impeachment

By Marcelo Rochabrun SAO PAULO (Reuters) - Protesters took to the streets in several Brazilian cities on Saturday to demand the impeachment of far-right President Jair Bolsonaro, whose popularity has fallen in recent weeks amid corruption scandals against the backdrop of the pandemic. This week, news broke that Brazil's defense ministry told congressional leadership that next year's elections would not take place without amending the country's electronic voting system to include a paper trail of each vote. Bolsonaro has suggested several times without evidence that the current system is prone to fraud, allegations that Brazil's government has denied