The current European Central Bank chief Mario Draghi, gave a negative outlook for the eurozone on Thursday, focusing on factors such as a hard Brexit as well as trade conflicts as reasons for there being a lack of growth.
Draghi told journalists that “This outlook is getting worse and worse in manufacturing, and it’s getting worse and worse in countries where manufacturing is very important, and because of value chains, this propagates all over the eurozone.”
He also added that the “Rising threat of protectionism and vulnerabilities in emerging markets” were the major reason for the gloomier mood in the whole manufacturing industry.
Draghi continued by also stating that geopolitical tensions and the chance of there being a “hard Brexit”, also adding to the risks of there being a gloomy future for manufacturing.
To make matters worse, Draghi also pointed out that monetary policy may aid the euro area, but only to a certain point, as governments will also need to show their support if the situation gets any worse.
Draghi added that “If we continue with this deteriorating outlook, fiscal policy will become of the essence.”
The ECB also stated that it could be lowering its negative interest rates even further in the future, along with also re-initiating its multi-billion-euro quantitative easing programme, in order to boost the eurozone economy as a whole.