Draghi Convinces All But Five Officials on ECB Proposal

  • Five Governing Council members said not to back full package
  • Stimulus decision matched ECB board proposal made on Thursday

Have Draghi's QE Measures Done Enough to Impress?

Mario Draghi convinced all but five members of the European Central Bank’s Governing Council to support a stimulus package that matched what he and his officials were proposing, according to euro-zone central bank officials.

The ECB president didn’t push for measures beyond those he announced on Thursday, the officials said. The ECB circulated the plan to the 25-member panel in the morning. It passed with the backing of all policy makers except the two from Germany -- Bundesbank President Jens Weidmann and Executive Board member Sabine Lautenschlaeger -- and the governors of the Dutch, Estonian and Latvian central banks, said the officials who didn’t want to be identified because ECB discussions are private.

The Frankfurt-based institution cut its deposit rate, extended quantitative easing by six months until at least March 2017, and broadened the assets for purchase to include local and regional debt. Draghi said the actions were aimed at countering "downside risks" to the outlook for prices and "weaker inflation dynamics" than previously predicted.

"In light of the dominant role of the decline of energy prices for price developments in the euro area and and the already taken extensive monetary-policy decisions, which can have risks and side effects, I didn’t consider an additional easing necessary," Weidmann said in a speech delivered in Frankfurt after Draghi spoke.

Some members were in favor of more aggressive action, and some of those who didn’t back the package supported elements of it, the people said.

An ECB spokeswoman declined to comment on the discussions. Spokesmen for the German, Dutch, Estonian, and Latvian central banks also declined to comment.

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