ECB’s Praet Laments Low Rates as He Leaves the Central Bank
ECB’s Praet Laments Low Rates as He Leaves the Central Bank
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For Peter Praet, leaving the European Central Bank isn’t easy, especially when you were unable to boost interest rates on your own savings.
In an interview with newspaper L’Echo published Friday, his last day in the job, the Executive Board member lamented the poor returns on his account in Belgium. The 70-year-old was the ECB’s chief economist, charged with crafting proposals for monetary policy, and was a key figure behind stimulus programs such as negative rates and quantitative easing.
“I don’t find the situation pleasant either -- I’d like to have higher rates on my savings,” Praet told L’Echo, which noted that he was laughing as he spoke. “I hoped at the moment I left the ECB, rates would be a bit higher. But we had all these new geopolitical shocks.”
Praet insists the ECB pursued the right strategy during his time but was thwarted by the difficulties in the Chinese economy in 2015, uncertainties around Brexit, and -- above all at the moment -- trade tensions with U.S. President Donald Trump’s administration.
“There is now the mentality of a zero-sum game at the international level: if one side wins, it’s to the detriment of others,” he said. “A protectionist spiral would be a disaster. There is no longer the “win-win” mentality of the globalization era. It’s up to political leaders to find answers to these uncertainties. There is a feeling of urgency.”
To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Paul Gordon
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