Mohamed A. El-Erian , Columnist

Draghi Acknowledges Twin Policy Challenges

The ECB needs to balance Europe's strong growth against continued stimulus.

January 25, 2018 at 5:30 PM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

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Photographer: Alex Kraus/Bloomberg

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European Central Bank President Mario Draghi’s remarks Thursday were a reminder that he faces two increasingly tricky challenges: balancing stronger-than-expected economic expansion against continued monetary stimulus; and overcoming “lowflation” in the context of a further appreciation of the euro currency.

Reflecting the view of the ECB’s Governing Council, Draghi welcomed the region’s “increasingly solid and broad-based expansion,” noting that both internal and external drivers were working together. At a news conference in Frankfurt, he acknowledged what has been reflected in markets for a while -- that the “continuous strengthening of the economy" has been "to some extent more than expected.”