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Draghi: Eurozone needs stable global growth

EUROPEAN UNION (OBSERVATORY) –┬áThe economy of the euro area needs a strong global growth and open trade to continue its flourishing, said the head of the European Central Bank (ECB) Mario Draghi.

“Positive developments in the euro area are not independent of the global momentum of growth,” Draghi told the heads of central banks and the ministers of the International Monetary and Financial Committee in Washington.

“Open trade, investment and sustainable financial flows play a key role in the transboundary spread of new technologies that contribute to improving efficiency,” he added.

Draghi previously informed German Chancellor Angela Merkel and other heads of European countries gathered in Brussels about the main risks for a favorable economic outlook.

Draghi also put trade friction at the head of the list of fears, according to a person familiar with the discussion.

In a presentation to the leaders of the bloc Draghi said that investments are rising to levels that have not been observed for at least ten years, private sector debt is falling, and capital ratios of healthy banks are almost 50% higher than at the beginning of the crisis.

Nevertheless, Draghi’s job is to worry about the future, so he made a few caveats.

Trade protectionism and the weakening influence of institutions that resolve disputes are the greatest potential risks. Tariffs and retaliatory measures can undermine confidence.