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Mr Rajoy did not spell out what additional central bank powers he had in mind, but mentioned both the US Federal Reserve and the Bank of England as possible models. He also referred to the “very important” shift in stance undertaken by the Bank of Japan, which surprised markets with an huge monetary stimulus package last week.
The Spanish leader said Europe needed the same “instruments that other countries have” and voiced frustration over Europe’s failure to progress more quickly towards a banking union. His call reflects, not just hope for a change in ECB policy, but also the growing frustration in Spain, and other European countries, with the hardline position of countries such as Germany and the Netherlands.
Speaking last week, Mario Draghi, ECB president, said there were clear limits to what the bank could do, although it was thinking about policies “consistent with our mandate” to ease the extreme differences in the cost of loans faced by companies in different eurozone countries.
Spanish officials would like Germany, and other surplus countries in the eurozone, to run a more expansionary policy, in order to help struggling economies in the crisis-hit countries to escape recession. They complain that Spanish and Italian companies still have to pay much higher interest rates on their debt than their competitors in northern Europe, and warn that such “asymmetries” are undermining the foundations of economic and monetary union.
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