Mario Draghi aims to fight for low interest rates. The ECB president is still insisting on his policy to maintain the ECB base rate on its lowest level. It is the current level of the rates that gives the economic recovery the support it needs. "It is important to understand that interest rates are low because the economy is weak. If we raised rates, we would further depress the economy, people would lose their jobs, and then their savings would be lower for longer," said the ECB president in a speech at the European Banking Congress in Frankfurt. Mr. Draghi also touched upon the issue of long-term savings in Germany, the pacesetter of the European economy. The expert believes that the rate on the long-term German bunds is no way directly related to ECB policy, but rather a reflection of capital flows inside Germany. When the ECB takes action to reduce uncertainty in the eurozone, it should help affect investors' desire to move their capital to Germany. Mario Draghi assumes that such a development should increase the rates of German bunds again. According to the survey for October, the inflation in the EU hit the lowest level for the last 4 years. As a counter move, the European Central Bank decided to launch exceptionally loose monetary policy in order to underpin the shaky economic recovery. The ECB surprised financial markets on November 7 by cutting its main refinancing rate to 0.25% from 0.5%. Meanwhile, the ECB deposit rate remains at zero level as before. “By keeping interest rates at a level that supports the recovery, we should see higher interest rates for savers going forward,” the ECB head asserted.
