How Mario Draghi will be remembered as head of the ECB
Mario Draghi’s final press conference as European Central Bank president included a discussion of the usual — monetary policy — and the not-so-usual: The biology of the bumblebee.
Draghi was responding to a question about his famous “whatever it takes” speech in 2012 when he started by comparing the euro to a bumblebee as a “mystery of nature” that shouldn’t be able to fly but could. At the time, he said the bumblebee would have to graduate to a real bee. On Thursday, he acknowledged that he’s since been told this was based on “dubious biology.”
“I would not really develop this concept any further,” he said in Frankfurt.
As his eight-year term draws to a close, Draghi was asked about quantitative easing, the outlook for the economy, criticism of his policies, and his legacy.
The central banker nicknamed “Super Mario” may have fallen short on his inflation mandate, but he’s also credited with saving the euro with his 2012 commitment to act as needed. Asked what words he has for his successor, Christine Lagarde, who takes over in November, he was — unsurprisingly — diplomatic.
“No advice is needed,” he said. “She knows perfectly well what she has to do. And by the way, she has a long period of time ahead during which she will have to form her own view together with the Governing Council.”
That remark echoes predictions by economists that Draghi’s latest stimulus package, announced last month, will lock in ultra-loose policy for the next three years. He said talk of his legacy was for another time, but did offer a broad comment on his eight-year term -- what he described as a dogged determination to meet the inflation goal.
“If there is one general thing I am proud of, it’s the way in which the Governing Council and myself have constantly pursued our mandate. This is something we collectively should be very proud. We can talk about legacy and all this later. But in a sense this is part of our legacy. Never give up.”
The Italian was also taken right back to the start, when his arrival in Frankfurt as ECB president was greeted with some skepticism in Germany. One newspaper sent Draghi a Prussian spiked military helmet as a gift to remind him of the ECB’s Germanic heritage and the need to be tough on inflation, though it’s now asked for it back.
Draghi’s light-hearted response was an old German saying, “Geschenkt ist geschenkt” — a gift is given away for good. “I plan to keep it.”
Lagarde’s arrival comes against the backdrop of a divided Governing Council, with the previous meeting marred by disagreement and objections from some to the reintroduction of QE. The public back and forth between officials ran for weeks, raising speculation Lagarde’s first job would be as a mediator between the two camps. But Draghi said Thursday that’s all in the past.
“One of the dissenters called for unity and full implementation of the policy package,” he said. “Another said bygones are bygones.”
And what does Draghi plan to do now after almost a decade of non-stop crisis fighting and a battle that pushed the ECB into uncharted monetary policy territory?
“Just ask my wife. She’ll know better, I think.”
--With assistance from David Goodman, Catherine Bosley, Lucy Meakin, Iain Rogers, Yuko Takeo, Piotr Skolimowski, Jana Randow and Alessandro Speciale.