FLASH: President Trump’s top economic adviser offered sharp criticism of the European Central Bank’s (ECB) revival of stimulus measures to spur the EU’s economy.
National Economic Council Director Larry Kudlow said that a ECB decision Thursday to extend a new round of cheap loans to the banking system wouldn’t be enough to fix the continent’s underlying problems.
ECB President Mario Draghi “is a very smart man. I am not here to take his inventory,” Mr. Kudlow said.
‘I’m just saying, another round of that version of QE aka concessionary cheap loans to banks is not the answer,’ he said.
“The answer is they have got to make labor and fiscal reforms throughout Europe, and most of those countries haven’t really done it, so their growth rates are uncomfortably close to zero.’
The ECB responded to sharp downward revisions to its Y 2019 projections for growth and inflation by announcing aother series of long-term bank funding and promising to keep interest at their current rock-bottom levels for longer.
The Trump Administration is forecasting US economic growth of about 3% this year, which is being delivered through tax cuts, de-regulation and new trade deals.
“If it were not for the US, our consumers are buying their goods, our businesses are buying their capital goods, right, industrial goods. We are the only demand they have
We are trying to help them. But at some point they’ve got to take measures –you know, help comes to those who help themselves,” Mr. Kudlow said.
On efforts by the US and EU to negotiate a trade deal, the talks have been constructive and that the 2 sides are moving forward.
“We are moving in the right direction to show that the United States and the EU can in fact have a much better trade relationship,” he said.
Transatlantic trade talks have not officially started and no launch date has been set yet, EU Trade Commissioner Cecilia Malmstrom said Thursday. The EU, which still needs a negotiating mandate, wants to narrow the scope of the talks to lowering tariffs on industrial goods and autos before opening it up to more straining issues, according to Ms. Malmstrom.
US Trade Representative Robert Lighthizer has told Congress that he would not conclude an agreement without including agriculture, while the EU wants the politically sensitive issue kept out of talks.
Have a terrific weekend