Despite the fact that in August political and economic turmoil lessened, the European Central Bank's (ECB) president Mario Draghi made Europe perk up its ears yesterday. His core message contained nothing new. The ECB plans to keep interest rates at 15% as planned.
Still, he gave several warnings that we should not lose our long-term vision, assuring that recovery in the euro zone will be "meager, small and uneven depending on the region." He also alluded to several geopolitical conflicts such as the Russia/Ukraine and Israel/Palestine struggles, because they will weigh down the recovery significantly. For example, Italy has entered an economic recession for the third time since the broader crisis began almost nine years ago. The situation is complicated, because it's not obvious that the country wants to enact necessary reforms as quickly as the EU has asked. Draghi himself said yesterday that countries that have carried out reforms are doing better than the others, which is a mild yet favorable pat on the back for Spain.
But the answers lie outside of central Europe at this point. We need authorities in politically tense areas to address their troubles if this small recovery stands a chance of survival.
