ECB’s big bazooka ‘absolutely necessary,’ Carney tells Davos

Bank of England chief says Frankfurt’s plan will preserve prospects of prosperity in Europe

Governor of the Banks of England Mark Carney and managing director of the International Monetary Fund Christine Lagarde smile prior to a panel “A Richer World, but for Whom”at the World Economic Forum in Davos.

Governor of the Banks of England Mark Carney and managing director of the International Monetary Fund Christine Lagarde smile prior to a panel “A Richer World, but for Whom”at the World Economic Forum in Davos.

 

The bond-buying plan unveiled by the European Central Bank (ECB) has laid the foundations for more prosperity in Europe, Bank of England chief Mark Carney said.

“I welcome the steps that the ECB took yesterday,” Mr Carney told a panel at the World Economic Forum in Davos, Switzerland.

“(They are) absolutely necessary to preserve the prospects of medium-term prosperity in Europe. This doesn’t deliver medium-term prosperity, it just creates the conditions for it.”

Separately, Taoisaeach Enda Kenny on Thursday warned Ireland’s economic recovery could be jeopardised by populist politics.

“I would not like to think that recovery in Ireland’s case would be put at risk by losing stability in terms of economic competence terms or continued creation of jobs,” he said.

“It’s very easy, actually, to lose all that hard-won gain and recovery by drifting towards a sense of populism without clarity about what that might deliver,”the Taoiseach said, in a thinly veiled reference to Sinn Féin.

Mr Kenny was taking part in a group discussion with other European leaders on growth and stability. They included the prime ministers of Finland, the Netherlands and Latvia, as well as the German economic minister.

“The Irish recovery is fragile and incomplete. We need another three to five years,” Mr Kenny told the World Economic Forum. His Government’s term is up in the middle of next year.

He later amplified his remarks.

“I’d like to think that people understand that our recovery is both fragile and incomplete and we do need another three to five years years of both political stability and economic stability so that the benefits of that can be felt by people through the length and breadth of the country.”

Dutch prime minister Paul Rutte attributed the rise of populist parties in the Netherlands to a failure by centrist politicians to provide answers to issues such as immigration. His Finnish counterpart, Alexander Stubb, said there was a need to have dialogue with populist parties, within limits.

Mr Kenny struck a different note, saying that support for populist parties grew out of frustration with mainstream politicians’ failure to deliver.

“If you don’t deliver, you make it easy for the opposition.The key is discipline, clarity and stability of agenda.”

The Taoiseach also voiced conditional support for a further renegotiation of the Greek bailout in the wake of the expected victory of left-wing anti- austerity part Syriza in elections this weekend. He said that he could not disagree with Mr Stubb’s view that new measures, short of actual debt forgiveness, were possible.

German economic minister Sigmar Gabriel said his advice to Greece was “to go further along the track we have agreed”.

Additional reporting Reuters