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Mr. Draghi would probably prefer to note the positives. Six months after the central bank began an unprecedented stimulus program, eurozone growth has improved. Unemployment is edging lower. Inflation is back above zero, if just barely. There are signs that credit is flowing more easily. The crisis in Greece has faded, for now at least.
A slowdown in the economy of China and other emerging markets has prompted wild swings in stock prices, although markets were relatively calm on Wednesday.
The Federal Reserve is poised to raise interest rates in the United States as early as this month, possibly causing borrowing costs to rise in the eurozone before growth is strong enough.
Some economists are even warning again about the eurozone’s lapsing into deflation, a broad decline in prices that is considered poisonous to growth and employment.
An influx of refugees into Europe from Syria and other conflict zones, while outside the purview of monetary policy, adds to the uncertainty. Confusion among European leaders about how to deal with the crisis raises questions about the political unity that is essential to the survival of the eurozone.
These factors could undermine the positive effects of the bond-buying stimulus program, known as quantitative easing, that the European Central Bank began in March as a way to pump money into the eurozone economy and force down market interest rates.
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And while an increase in official interest rates by the Fed could spill over into the eurozone and raise borrowing costs, higher interest rates in the United States would also tend to strengthen the dollar and weaken the euro. That would be good for eurozone exporters, because their products would be cheaper for customers paying in other currencies.
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Full article on New York Times