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Closing summary: Protests in the heart of the ECB
It’s time for a closing summary.
Mario Draghi’s press conference in Frankfurt was dramatically disrupted today by an activist, in a protest against the European Central Bank’s policies.
In a remarkable security breach the protestor, understood to be Josephine Witt, leapt on the desk, showering glitter on the ECB president.
She also threw leaflets condemning the “undemocratic” Bank, and its role in the financial crisis, and chanted “End the ECB dictatorship” repeatedly, before being removed by security staff.
The press conference was briefly suspended, before Draghi returned to tell reporters that his QE programme was delivering benefits to the eurozone economy, and to call for Europe’s labour market to be reformed to help younger people.
According to the ECB, Ms Witt registered as a journalist to attend today’s press conference in the Bank’s new Frankfurt headquarters. Staff took “immediate and effective action”, it said in a statement.
Police confirmed that they arrested a 21-year-old woman at the scene; she was later released:
Witt told Bloomberg tonight that she was motivated to protest against Draghi because he’s never been elected.
What’s very concerning to me is that Mario Draghi as ECB president is not actually serving the societies, but imposing rules on them — without ever being elected,” the 21-year-old said.
“This press conference is the little, little bit of democracy that the ECB gave us. I used this opportunity to express my criticism.”
It’s the latest in a series of protests against the ECB since the financial crisis began; last month, anti-austerity protestors caused major disruption in Frankfurt.
Once the drama was over, Draghi rebuffed concerns that the ECB’s new QE stimulus programme might falter, for lack of eurozone debt to buy:
“Now the worries about potential scarcity of government bonds, sovereign bonds to be bought under our purchase programme are just a little exaggerated. We don’t see problems. Both direct and indirect evidence and market feedbacks show that there isn’t any problem and our programme is flexible enough in any event to be adjusted if circumstances were to change.”
And he also refused to countenance the idea that Greece might default:
“I don’t even want to contemplate that. And based on the Greek government leaders’ statements this option is not contemplated by themselves as well. So I’m not ready to discuss any possible situation like that.”
But rating agency S&P then raised the stakes tonight, by cutting Greece’s credit rating deeper into junk.
I’ll be back tomorrow for another busy day of liveblogging, but probably one free of today’s drama (right, Josephine?…)
Thanks for reading and commenting, as ever. GW
Ms Witt registered as a Vice reporter, according to the Telegraph:
The economics correspondent Pete Spence explains her motives:
Ms Witt said she would continue to engage in “hardcore activism” in response to what she believed was an “undemocratic” ECB. She added that recent protests in Frankfurt during the opening of the ECB’s new offices were a reaction to Mr Draghi’s leadership. “[He] never got a mandate, never got voted for or elected,” she said.
“He imposes policies on these societies that are completely undemocratic,” she added. A friend of Ms Witt said she opposes what she describes as “European neo-liberalism”, and argued that the ECB cannot act “without a state of surveillance, of police and violence”.
If you squint at the photos taken earlier, you can see this is indeed the paper swirling around Mario Draghi’s head.
Protesters aren’t usually verified on Twitter, so I can’t confirm whether this actually is today’s activist or not: #disclaimer
While the credit rating downgrade isn’t a surprise, Standard & Poor’s has some serious concerns over Greece.
S&P says Greece’s economic state is “highly uncertain”, and warns that:
“without deep economic reform or further relief, we expect Greece’s debt and other financial commitments will be unsustainable”.
Greece’s solvency increasingly hinges on “favourable business, financial, and economic conditions”, it adds.
But despite the current problems, S&P reckons the government will manage to continue to pay salaries,pensions in cash (rather than non-negotiable IOUs) despite “weakening cash fiscal receipts”.
S&P downgrades Greece
Breaking news: Greece’s credit rating has just been cut by Standard & Poor’s, which also left the country on a negative outlook.
Wonder what S&P think of the ECB’s security system…
Video: That protest in full
For those of you who haven’t seen the protest already, this video captures the moment Mario Draghi’s opening statement was dramatically disrupted
Hopefully the ECB tighten up their security checks, before someone else pretends to be an economics hack.
ECB: Protester registered as a journalist
The European Central Bank has now issued a formal response:
The European Central Bank’s press conference was briefly disrupted by a protester today, who jumped on to the stage and threw confetti. Staff from the ECB are investigating the incident.
Security staff took immediate and effective action.
Initial findings suggest that the activist registered as journalist for a news organisation she does not represent. Like all visitors to the ECB, she went through an identity check, metal detector and x-ray of her bag, before entering the building.
ECB President Mario Draghi remained unharmed and calmly proceeded with the press conference. <end>
Here is a copy of the paper thrown at Mario Draghi today, accusing the ECB of arrogance and creating human disasters through its policies (thanks to Pete Spence of the Telegraph).
There is a Femen activist called Josephine Witt (short profile here), although the statement suggests it is an attack on austerity rather than the patriarchy.
Today’s incident feels unprecedented in financial circles; I can’t recall any central bank protestor getting so close to their target before, especially inside the central bank’s own headquarters.
But it’s not the first time the ECB has been a target. Last month, 350 people were arrested after protests disrupted the official opening of the new headquarters in Frankfurt, with several police cars set ablaze.
And the ECB’s decision to hold its monthly meeting in Barcelona in 2012 backfired, with thousands of police on the streets as protest marches took place.
It’s important to note that Draghi is completely unharmed — not too surprising, given confetti doesn’t pose much risk to human health. He certainly got off lighter than WTO Director-General Renato Ruggiero, who in 1999 was hit with cream pies by environmental protesters.
Update: He’s not a central banker, of course, but we shouldn’t forget the attempt to ‘pie’ Rupert Murdoch in 2011 at the UK parliament.
Police: 21-year-old arrested
Frankfurt police say the protester is a 21-year old woman from Hamburg. She’s currently being questioned.
The FEMEN activist group have claimed responsibility for the protest.
Femen have previously demonstrated against Vladimir Putin over the Ukraine conflict, and against former IMF chief Dominique Strauss-Kahn.
Confirmation from Reuters:
- GERMAN POLICE SAY HAVE DETAINED WOMAN WHO DISRUPTED ECB NEWS CONFERENCE, SHE IS BEING QUESTIONED – RTRS
The women who threw paper and confetti at Mario Draghi is now in custody in Frankfurt, according to Bloomberg.
After the drama:
And that’s the end of the press conference. Unusually, there is a small ripple of applause — which Mario Draghi says is “very comforting”.
A couple of people wander to the front to take photos, but Draghi’s swiftly out of the room before there’s any more drama.
Finally, Draghi takes a question from a group of young people who won a competition to attend today’s press conference.
They ask for his views on the employment market today, and the prospects when they enter the labour market in a couple of years.
Best question of the day, Draghi replies.
The key to improving the eurozone’s labour market is to eliminate “duel market conditions”, he says, so that young people have a fair change of getting employment.
We must make it easier to hire people, cut the time people are unemployed, and change educational structure to make sure people have the right skills. That’s the most important thing.
Finally, a question about the protest. A journalists asks whether the European Central Bank president is OK, as he seems pretty calm.
You’ve answered your own question there, Draghi smiles back.
He then returns to normal business, insisting that economic conditions are improving, and bank lending is improving.
However, the recovery is reliant on the ECB sticking with its monetary policy measures.
Clarification. Another photo just arrived, showing that the protestor was actually saying “End the ECB Dick-Tatorship”. A subtle difference.
The European Central Bank says it is “investigating” today’s protest:
If you’re just tuning in, you can watch Mario Draghi’s press conference online here. He’s now covering weighty monetary policy issues, and their role in underpinning the eurozone recovery.
Amazingly, no-one has actually asked a question about the protest (“Are you OK, Mr Draghi?” might be a good place to start).
The ECB chief says that the press conference will run for another 10 minutes to make up for the time lost when it was dramatically disrupted.
Mario Draghi appears to be unshaken by the incident. He is now fielding questions about the eurozone. He says that he doesn’t even want to contemplate the possibility that Greece might default on its debts.
And he points to Spain as a success story, saying it is experiencing a “strong and employment rich recovery, supported by labour market reform”.
Bloomberg have uploaded a video clip too.
It shows that the protester was shouting “End the ECB dictatorship” before being bundled out.
Mario Draghi’s opening statement is now online here (without any reference to the disruption)
Here’s Associated Press’s early take on the protests:
A female protester interrupted the European Central Bank’s press conference on Wednesday, screaming “End ECB dictatorship” while she rushed the stage and threw what looked like confetti.
The action happened as ECB President Mario Draghi was delivering opening remarks after the bank’s latest policy meeting.
Draghi reappeared on stage a few minutes later and carried on with his remarks.
Some activists accuse the ECB of trying to enforce budget austerity measures on eurozone countries, such as Greece, that are under financial bailout programs.
Photos: Protester disrupts ECB press conference
Here are photos of the moment that the European Central Bank’s press conference was disrupted by a protester shouting “end the ECB dictatorship.” [see earlier blogpost onwards]
It shows she threw paper and confetti at the head of the ECB, Mario Draghi, before being carried out of the room:
Draghi has also played down concerns that the ECB’s QE stimulus programme will struggle to find enough eurozone bonds to buy.
Draghi is now taking questions from the media – no-one has asked if he’s OK following the attack, though.
Asked about Greece, he says that the ECB will support the Greek banks for as long as they are solvent. The ECB has now extended €110bn to the Greek financial sector, he adds.
Draghi concluded his statement by warning that the eurozone needs more supply side measures to tackle its high structural unemployment & low potential output growth.
Draghi appears completely unruffled by the disruption, and has returned to his statement.
He says the ECB is monitoring inflation closely, and still expects inflation to rise back towards its target in 2016 and 2017.
Here’s a better photo of the moment that Mario Draghi’s press conference was dramatically disrupted a few moments ago.
OK, we’re back now — Mario Draghi is unhurt, and he’s continuing with his opening statement.
A remarkable security breach, though — this press conference is taking place inside the ECB’s headquarters.
It looks like the protestor threw confetti at the ECB chief.
The protestor has been removed from the room, and the press conference has been suspended.
ECB press conference disrupted
Mario Draghi has then been dramatically cut off, as a woman rushed to the front press conference repeatedly shouting “End ECB dictatorship. End ECB dictatorship”*
She also threw something at the ECB chief – which looked like paper.
Press conference begins
Mario Draghi starts cheerfully, saying he’s “very pleased” to welcome the media to the press conference.
He confirms that the ECB began its stimulus programme as planned. It is proceeding smoothly.
There is “clear evidence” that the policy measures we have put in place are effective, he declares. Borrowing conditions for firms and households have “improved notably”.
The press room in Frankfurt is nicely packed…and there’s a burst of camera action as Draghi arrives.
Angst breaking out across finance Twitter
Umm no sign of Mario yet….
Maybe the lifts are broken again, like in January…..
Mario Draghi’s press conference is being streamed live, here.
Reminder: we want to hear Mario Draghi’s views on his QE programme, Greece, and the state of the eurozone, when the press conference starts in around 5 minutes.
Lunchtime summary: Stock markets at 14-year high ahead of ECB
A quick recap.
ECB president Mario Draghi will hold a press conference at 1.30pm BST (2.30pm Frankfurt), where he’s expected to discuss the state of the eurozone economy and the early success of his QE programme.
He may be asked whether the bond-buying programme could end early, if it’s successful.
European stock markets have hit their highest levels in 14 years, and the euro has fallen back, as investors prepare for this afternoon’s ECB press conference.
Traders are calculating that central banks will maintain accommodative monetary policy for some time, with the eurozone still in negative inflation and China’s economy slowing.
Nick Gartside, fund manager at JPM Global Bond Opportunities Fund, explains:
Globally investors should bear in mind this is not the time to fight central banks.
Powerful policies are forcing bond investors to sell bonds back to the central banks and redeploy those assets, and we cannot forget how much this supports risk assets.”
That’s helped to drive the FTSE 100 to a new alltime high, over 7100 points for the first time.
German bonds are hitting new highs, driving the interest rate on its 10-year bonds close to zero.
It’s been a worrying morning for Greece, though.
“Greece is moving ever closer to the abyss.”
And new budget data has shown that Greece only achieved a primary surplus of 0.4% last year, well below target [details here].
The Kathimerini newspaper says this raises fresh fears over Greece’s financial health.
The budget figures show “that Greece needs external financing not just to meet redemptions but also to meet its current financing needs,” said James Nixon, chief European economist at Oxford Economics in London.
“There’s very little appetite in Europe to extend significant lending to Greece, and so that means that effectively there will be a demand for renewed austerity and further fiscal tightening.”
ECB leaves interest rates at record lows
It’s official: The European Central Bank has voted to leave the key interest rates across the eurozone unchanged, at today’s meeting.
That means the benchmark rate remains at its lowest level ever, at 0.05%. Banks will still be charged 0.3% for overnight borrowing from the ECB, and hit with a negative interest rate of -0.2% for leaving cash in the ECB’s vaults.
- ECB SAYS LEAVES BENCHMARK REFINANCING RATE UNCHANGED AT 0.05%
- ECB SAYS LEAVES INTEREST RATE ON MARGINAL LENDING UNCHANGED AT 0.30%
- ECB SAYS LEAVES INTEREST RATE ON DEPOSIT FACILITY UNCHANGED AT -0.20%
Here’s the statement. Now we must await Mario Draghi’s press conference, in just under 45 minutes.
Heads-up, the ECB is about to announce the decisions on monetary policy taken at today’s meeting:
Slovakia: Greece is close to the abyss
Slovak finance minister Peter Kazimir has thrown cold water on hopes of a breakthrough in the Greek bailout talks next week.
Speaking after a cabinet meeting in Bratislava, Kazimir warned that Greece is heading towards ‘the abyss”.
Reuters has the details:
“Given the we have lost a lot of time, I am sceptical,” Kazimir told reporters after a Slovak cabinet meeting when asked if he believed the Riga meeting could bring a breakthrough.
“Greece is moving ever closer to the abyss.”
Kazimir is a member of the Eurogroup, which will meet next Friday in Riga. Greece hopes that this will unlock some aid (as we reported last night).
However, German finance ministry spokesman Friederike von Tiesenhausen has just warned reporters in Berlin that talks are deadlocked:
He also denied this morning’s rumour that Germany was preparing for Greece to default.
The damage suffered by the Greek economy in the last four years has been exposed by new fiscal data published by statistics body Elstat this morning.
The figures confirm that Greece’s GDP shrank from €207bn in 2011 to €170bn in 2014.
And that means its national debt swelled from 171% of GDP to 177% GDP last year, despite the billions of Greek debt being written down in 2012 and heavy spending cuts.
The report also shows that Greece posted a small primary surplus [ie, ignoring debt repayments] of 0.4% of GDP in 2014; much lower than the 2% estimated by the previous Greek government last October.
The broader deficit was 3.5% of GDP, slightly above the 3% target set by Brussels.
Today’s antitrust charge against Google over its Shopping service could be just the start, says competition commissioner Margrethe Vestager.
She’s briefing reporters in Brussels now, explaining that other services are also under the Commission’s microscope as it tries to ensure consumers aren’t exploited.
Vestager is also denying that there’s an anti-American tinge to the probe.
Brussels hits Google with antitrust charge
After five years of work, the European Commission has just hit Google with a charge that it abuses its dominant position in the search industry.
The case relates to Google’s shopping service; the EC says the search giant stifles competition by favouring its own pages.
Brussels has also opened a separate investigation into Google’s Android operating system.
Competition chief Margrethe Vestager says:
“I have also launched a formal antitrust investigation of Google’s conduct concerning mobile operating systems, apps and services. Smartphones, tablets and similar devices play an increasing role in many people’s daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company.”
Antitrust: Commission sends Statement of Objections to Google on comparison shopping service; opens separate formal investigation on Android
More to follow…
The Eurozone Rumour Mill is grinding hard this morning, with Germany’s Die Zeit newspaper claiming that Angela Merkel’s government is preparing a plan to keep Greece inside the euro area even if it defaults.
According to Die Zeit, Germany fears that Greece could soon miss a debt repayment, and could be prepared offer concessions if Athens can show its committed to reforms.
The German government is declining to comment…
The drop in short-term borrowing costs in the eurozone is truly remarkable, with only Greece missing out:
The Greek government has cleared one, rather small, hurdle this morning by auctioning over €800m of three-month debt.
This will cover the cost of repaying three-month bonds which mature soon. The debt was almost certainly bought by Greek banks, who will receive a yield of 2.7% [so Athens must pay much more to borrow until July than Berlin would pay to borrow until 2045]
Update: German’s ten-year government bonds just hit a new record high:
- GERMAN 10-YEAR BUND YIELD FALLS TO RECORD LOW BELOW 0.1291%
Remarkable scenes in the bond markets today – German 30-year sovereign debt is changing hands at an effective interest rate of just 0.57%.
German 10-year bunds are now yielding just 0.13%, meaning Berlin can borrow for basically nothing for the next decade. And eight-year bund yields turned negative yesterday, meaning they’re worth more than their face value.
We can thank Mario Draghi for this situation. Under the ECB’s quantitative easing programme; it can buy bonds at negative yields as long as they’re not below its own deposit rate of -0.2% (what it charges banks to leave funds in the ECB vaults). Traders are piling into eurozone bonds, confident that they can sell them to Frankfurt at a guaranteed profit.
German two-year bond yields are already below this mark, at -0.27%. Some economists suggest the ECB may be forced to cut the deposit rate even lower, to find enough bonds to meet its QE targets.
The Turkish lira isn’t a pretty sight this morning — it just hit a record low against the US dollar.
Investors are getting jittery about June’s general election, and the sustained pressure which president Recep Tayyip Erdoğan is putting on Turkey’s central bank.
Erdogan has pushed hard for interest rate cuts to stimulate the economy, despite Turkey’s inflation rate rising to 7.6% last month.
His wider goal, if his AK party secures a sizeable victory in the election, is to rewrite Turkey’s constitution to create a full-blown presidential system giving him a tighter grip on power [officially the presidency is a ceremonial role, but Erdogan, a former prime minister, has other ideas, putting him at odds with his successor].
Nour Al-Hammoury, chief market strategist at ADS Securities in Abu Dhabi, is also keen to hear about how Mario Draghi might end his stimulus programme:
No one is expecting the ECB to change their policy, but questions will be asked about the length of the QE programme if European economies continue to grow more quickly than expected.
Investors will want to know whether the ECB has revised its exit strategy.
Mario Draghi could send the euro soaring if he gives any suggestion that his QE programme will be curtailed earlier than planned.
Currently the ECB is committed to buying €60bn of government bonds, and other debt, per month until September 2016. But there is speculation that it could ‘taper’ the plan if it succeeds in driving inflation and growth.
Ilya Spivak of DailyFX explains:
“The Eurozone economy has shown some signs of life in recent months and the central bank chief will almost certainly have to field questions about the possibility that QE will be cut short if growth and inflation mend faster than expected.
Rhetoric opening the door to such a possibility may be interpreted as a relative shift away from the ultra-dovish extreme on the policy outlook spectrum, boosting the Euro.”
The euro is currently worth $1.0607, close to its lowest level in 13 years. A weak single currency should help push inflation up, so Draghi is likely to dampen talk of tapering.
The FTSE 100 has just nudged a new record high of 7102 points.
High street chain Next is leading the way, up 2.3% after JP Morgan raised its price target.
Tony Cross of Trustnet Direct says the Chinese slowdown is the big story in the City this morning:
The big point of interest is the swathe of economic data we saw released from Beijing overnight – headline GDP was as expected at 7%, but a number of other readings fell short of expectations. However, rather than this initiating another rally for local markets, there’s growing concern that Chinese stocks are in bubble territory and as a result many traders have remained sidelined.
The Shanghai stock index has surged by a remarkable 28% this year, as retail investors pile into shares despite signs the economy is weakening. This kind of exuberance doesn’t always ends well….
Here’s your regular reminder of Greece’s looming debt repayments, via Mike Bird of Business Insider.
I was going to knock up a list of key points to watch out for from the ECB today…. but Bloomberg’s Alessandro Speciale has already nailed it.
- Must we really start worrying about tapering? (might the ECB end its QE bond-buying programme earlier than planned, if it succeeds in stimulating the economy
- Are the March forecasts too optimistic? (minutes of the Bank’s last meeting showed some policymakers doubt the forecast of inflation hitting 1.8% in 2017)
- Will the ECB find enough assets to buy? (some analysts suspect the pool of eurozone bonds could run dry as the QE programme mops them up)
- What is the latest on Greece? (will the ECB keep providing emergency funding if the April 24 deadline for a deal is missed?)
- Is there progress on structural reforms? (Draghi will surely repeat his regular plea to eurozone politicians not to slacken off)
European markets calm after Chinese growth slows
European stock markets are inching higher in early trading, as we await the ECB’s press conference this afternoon.
The FTSE 100 is up 10 points, with investors digesting the news overnight that China’s economy grew at its slowest pace in six years.
Chinese GDP expanded by an annual rate of 7% in the January-March quarter, according to government data, broadly in line with forecasts (and official targets).
But the underlying picture is less healthy, as Reuters explains:
Activity indicators, which are regarded as a more accurate picture of the economy, were all weaker in March than expected. Factory output climbed 5.6% in March from a year ago, below forecasts for a 6.9% gain.
Most tellingly, China’s power usage declined 3.7% compared with the previous year, the biggest drop since late 2008, when China’s economy was hit by the global financial crisis.
And that could mean more stimulus measures from Beijing…..
Greek bond yields spike on default fears
There’s an early selloff in Greek bonds this morning, despite the government claiming it will reach a deal with creditors next week.
Traders have driven the yield (or interest rate) on 10-year Greek bonds over 12%, from 11.9% last night.
The Greek government’s refusal to proceed with any privatizations, and its pledges to reverse labor-market reform, pension reform and budget savings can’t be accepted by the country’s creditors, the official said, asking not to be named as talks between the two sides are not public.
Brussels insiders have been consistently less optimistic than their Greek counterparts since this crisis began.
The Agenda: It’s ECB Wednesday
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The European Central Bank is top of the agenda today, as it holds its latest monetary policy committee meeting.
No, don’t adjust your calendars – it’s not Thursday already; the ECB is gathering a day earlier than usual so Mario Draghi can jet off to Washington for the International Monetary Fund’s Spring Meeting.
We’re not expecting any changes to eurozone interest rates (they can hardly go much lower, and it would be madness to raise them), so the real action comes at 1.30pm BST (2.30pm Frankfurt time) at Draghi’s press conference.
The ECB chief will be quizzed about his new QE bond-buying programme, which is giving the eurozone a much needed boost, and the state of the wider economy.
Stan Shamu of IG suspects Draghi will sound upbeat:
The press conference deserves some attention given Mario Draghi could make some positive commentary around signs of improvement in the economy.
Draghi’s views on the Greek crisis will also be worth hearing (as ever), as we tick towards another crunch deadline.
The ECB is understood to have thrown Athens a small lifeline last night, by offering its banks another €800m in emergency funding. That takes the total liquidity available to €74bn; Reuters reckons there’s around €4bn left.
Greece continues to loom over the markets today, amid speculation that it won’t reach a deal with its creditors at the next eurogroup meeting on 24 April.
Last night, deputy foreign minister Euclid Tsakalotos rejected such talk, declaring:
“I am absolutely confident an agreement will be reached on 24 April. Deals are always done five or three or one minute before midnight, it’s not unusual that they should go right to the brink.”
Or occasionally, right over the brink…..
I’ll be tracking all the main events through the day.
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