Speaking at the ECB’s monthly meeting in Frankfurt, he said it was clear from the fourt letters that have been published, “that there was dialogue by Mr Trichet and the decision by the Government.”
Mr Draghi’s predecessor, Jean Claude Trichet, was in charge when the Government entered into a €67.5bn EU/IMF bailout in 2010.
Mr Draghi said it was important to remember that the context was much different in November 2010 than it is now. However, he pointed out that Ireland is forecast to be the fastest growing economy in the eurozone next year, which suggested that the bailout, “wasn’t such a stupid idea”.
Mr Draghi has not yet considered the invitation to Mr Trichet or other ECB members by the Oireachtas to appear before the banking enquiry. “We answer to the European Parliament. We do not answer to national parliaments,” he added.
Interest rates were left unchanged at the monthly meeting, but Mr Draghi gave the clearest indication yet that the ECB would embark on a round of quantitative easing. “TheGoverning Council is unanimous in its commitment to using additional unconventional instruments within its mandate. The Governing Council has tasked ECB staff and the relevant Eurosystem [central bank] committees with ensuring the timely preparation of further measures to be implemented if needed,” he said.
Reuters reported on Tuesday national central bankers in the eurozone planned to challenge Mr Draghi over his communication style and in particular his mention of a balance sheet target for how much money the ECB planned to pump into the economy after the Governing Council agreed not to make any figure public in September.
Mr Draghi reaffirmed that target, saying the balance sheet would “move towards the dimensions it had at the beginning of 2012”.
He said the Governing Council had signed up to that unanimously but nodded to some policy differences. “When we differ in our views and our policies... there is no drawing of a line between North and South. There is no coalition, not at all,” he said.
“The dinner [before Thursday’s meeting] went better than expected,” he said. The euro hit a 26-month low and peripheral European bond yields fell after he affirmed the target and highlighted risks to economic growth. To keep the eurozone from slipping into deflation, the ECB has started pumping more money into the banks through purchases of private debt and offers of long-term loans, aiming to boost its balance sheet by up to €1tn.
The ECB is expected to wait until it gets a clearer view of the impact of its asset purchases and four-year loans before adding further stimulus.
Additional reporting Reuters