ECB's Draghi Says Anxiety About Monetary Union Is Misplaced -- Update

By Brian Blackstone Features Dow Jones Newswires

LAUSANNE, Switzerland -- European Central Bank President Mario Draghi on Thursday launched a defense of European integration, saying the European Union is "being wrongly held responsible" for decisions that belong to individual countries.

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"In a world where Europe's relative size is shrinking and where technology, the environment and the market are permeating national borders, the case for acting together as a way to regain capacity is stronger than ever," Mr. Draghi said in prepared remarks in Lausanne, where he was accepting an award from the Jean Monnet Foundation for Europe, a mostly publicly funded organization that hosts conferences about European issues.

"It is beyond question that we face challenges today that can only be addressed by countries in Europe acting together," Mr. Draghi said in prepared remarks in Lausanne, where he was accepting an award from the Jean Monnet Foundation for Europe.

Mr. Draghi's prepared remarks stayed clear of the monetary policy outlook, though he cited Europe's monetary union as one area where anxiety about Europe is misplaced.

Monetary union "is sometimes claimed to be the cause of low growth in parts of the euro area. Yet we have seen that for countries that implemented structural reforms and ran sound fiscal policies, the single currency has been no barrier to success," he said.

At its meeting last week, the ECB kept interest rates and other policies unchanged as expected. At a news conference, Mr. Draghi welcomed evidence of economic recovery but said policy makers hadn't discussed reducing their stimulus, which includes a subzero deposit rate and a EUR60 billion-a-month ($65.5 billion) bond-purchase program.

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In his comments in Lausanne, Mr. Draghi said European policy makers must address some of the root causes of the anxieties of its citizens. "If EU citizens are to endorse the notion that common action can improve their lives, they have to see that in areas where the EU does act, it is effective."

Mr. Draghi's comments on Europe didn't address the debate in specific countries. Still, his defense of the EU came days ahead of an election in France on Sunday that features two competing visions of Europe.

Presidential candidate Marine Le Pen has campaigned against European institutions and wants to pull France out of the euro. Her opponent, Emmanuel Macron, has embraced France's place in the EU and the euro.

Tom Fairless contributed to this article.

Write to Brian Blackstone at brian.blackstone@wsj.com

(END) Dow Jones Newswires

May 04, 2017 12:52 ET (16:52 GMT)