Mario Draghi, head of the European Central Bank (ECB), discusses the bank’s view on recent economic and monetary developments with the Parliament's economic committee on 14 July. With interest rates at historically low levels, Mr Draghi is expected to comment on the tools the bank has left to respond to the weakness in the European economy. He is also likely to face questions about the euro’s exchange rate against the US dollar. Follow the meeting live from 19.30 CET.
Low inflation and weak growth have made the ECB pursue a policy of low interest rates in recent years in order to boost lending and investment, but this stimulus has almost reached its limits with rates now close to zero. In June the ECB cut rates to record lows and even imposed negative rates on bank deposits, i.e. banks have to pay to keep funds with the central bank. As there is no further room for reduction, the bank will have to look for other, non-conventional, ways to reach its goals, which may include purchases of financial assets or long-term loans to banks.
In May the euro climbed to a 2.5-year high against the US dollar before retreating a little. Some EU governments have expressed concerns that the euro’s strength hurts the economic recovery as it makes European exports more expensive and imports more competitive.
The meeting in Strasbourg is part of the regular monetary dialogue of MEPs with the ECB that takes place every three months. It is aimed at ensuring the transparency and accountability of the central bank’s actions.