Draghi’s Dangerous Farewell
The risks of further monetary stimulus measures by the European Central Bank outweigh the benefits. Additional stimulus will either amount to less than anticipated or will not be sustained – yet it could still undermine the eurozone's financial system and public finances in far-reaching ways.
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PRINCETON – Mario Draghi risks deepening the eurozone’s problems in the final weeks of his eight-year term as president of the European Central Bank. He has promised that the ECB will reduce interest rates further to spur the eurozone economy. But policymakers have room for only modest rate cuts, which will do little to boost growth – and will put potentially intolerable pressure on the eurozone’s fragile banks.