Asked about the election of Donald Trump as US president, the head of the ECB offered his perspective not just on what he called the “radically new US administration”, but also Brexit and the Italian referendum that cost prime minister Matteo Renzi his job this month.
National votes in the Netherlands, France and Germany could further muddy the outlook, he said.
“Just look at the election calendar for the year to come and that is by itself a source of uncertainty,” Mr Draghi said in Frankfurt after the ECB’s latest policy announcement yesterday.
“So there is a big uncertainty, much of which is political, and whether we can do something about that or not is an open question. I think what the central banks can do is to keep a steady hand.”
Mr Draghi’s comments came after the ECB said it would extend its quantitative-easing programme by nine months to the end of 2017, buying at a reduced monthly pace with the caveat that it can step up or prolong purchases if needed. The euro fell 1% against sterling, to 84.3 pence.
With upcoming elections in some of the region’s biggest countries potentially putting structural reforms on the back burner and a surge of populism undercutting support for European integration, the central bank may find itself tethered to non-standard measures for some time.
Mr Draghi said it was very difficult to assess what the effects from 2016’s “big changes” will be, but it is going to come sooner or later.