Draghi, annotated

What the ECB president was <em>really</em> thinking.

We don't normally do straight-up linkblogs, but sometime-NS-contributor Paweł Morski's "annotated highlights" from the ECB press conference yesterday are a must-read. Here's a taster:

As regards fiscal policies, euro area countries should build on their efforts to reduce government budget deficits and continue to implement structural reforms, thereby mutually reinforcing fiscal sustainability and economic growth. Fiscal policy strategies need to be complemented by growth-enhancing structural reforms. […] To support employment, wage-setting should become more flexible and better aligned with productivity.

The floggings will continue until morale improves. Our only idea for growth is to give all the German MEPs little “Ask Me About the Hartz IV Labour Reform” badges and hope the word spreads.

So this could also go ahead speedily. I am sure that the European Commission has done a splendid job on both accounts.

You want to know how cool I am? I can say this stuff with a straight face.

Informative and entertaining. It's like an economics version of Where on Earth is Carmen Sandiago?

Anyway, the key takeaway – if you aren't clicking through – is that Mario Draghi has a habit of dropping bombshells where they really shouldn't be. Draghi suggested that the European Commission should draw an explicit distinction between uninsured depositors and bondholders in favour of the depositors – à la America's FDIC – despite the fact that the funding of European banks is far more reliant on bondholders than American banks are. The advantage of such a move would be that it would lessen the risk of a bank run, Cypriot-style; but if it scares off bondholders instead, it could be disastrous.

An important point – buried in the answer to a question at a press release. It's hardly "whatever it takes", Draghi's famous intervention which may have saved the Eurozone for a bit.

Mario Draghi. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Cabinet audit: what does the appointment of Liam Fox as International Trade Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for International Trade.

Only Nixon, it is said, could have gone to China. Only a politician with the impeccable Commie-bashing credentials of the 37th President had the political capital necessary to strike a deal with the People’s Republic of China.

Theresa May’s great hope is that only Liam Fox, the newly-installed Secretary of State for International Trade, has the Euro-bashing credentials to break the news to the Brexiteers that a deal between a post-Leave United Kingdom and China might be somewhat harder to negotiate than Vote Leave suggested.

The biggest item on the agenda: striking a deal that allows Britain to stay in the single market. Elsewhere, Fox should use his political capital with the Conservative right to wait longer to sign deals than a Remainer would have to, to avoid the United Kingdom being caught in a series of bad deals. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.