From the moment Mario Draghi pronounced his famous and succesful statement-opinion to cut markets speculation towards the common currency- policy makers will do “whatever it takes” to preserve the euro- monthly press conferences following the ECB’s council meetings on interests rates have become a real show of verbal sleight of hand.
For instance, in July 2013 Draghi committed to hold rates or even reduce them, which allowed a bunch of people to call the Italian a “trader”, partly ignoring that what the central bank’s leader did was exactly the same that he currently does: saving time. Then he wanted the Economic and Monetary Union (UME in its English initials) to finish their homework and Germany to decide its chancellor Angel Merkel’s future. Now he expects vital steps regarding the Banking Union and debt mutualisation to be given.
Some analysts and market watchers are starting to consider Draghi’s communication policy has certain risks. One of them is reflected in the fable of the boy who cried wolf, so that markets may not believe the ECB’s president at the end.
That is the sense of experts’ doubts about the possible interest cut next June- they mostly bet on a slight reduction of key rates as well as deposit.- This decision is apparently clear now, but nobody takes it for granted since the final move continues pending on figures. Between May and June ECB’s meetings numbers of the EU growth in the 1Q14, and also the Price index are expected to be published. They all along with the euro evolution and Ukraine’s situation will tip the balance to one side or another.
Anyway, the ECB and Draghi hold untouched the communication principles that gave birth to the Frankfurt-based institution, and as a consequence its credibility where lies its major strength: transparency, self-dicipline and predictability.