22 Jan 2016
Davos 2016- Refugees are a challenge and an opportunity: Draghi
FXStreet (Mumbai) - ECB president Mario Draghi in his speech in Davos referred to the refugees heading to Europe both as a challenge as well as an opportunity. “Our society will be changed by this. In which direction, we can only guess” Draghi said. He also feels that governments in Europe will have to increase spending in order to tackle the refugee problem. The economic interpretation of this statement could be that Draghi is hinting at possibility of more stimulus.
He is unsure about the time that Europe will take to transform the challenge it faces in the form of refugee problem into an opportunity. He added that “there is determination, and confidence. That’s the most important thing, because the size of the challenge could actually undermine the confidence and make fear prevail over any other consideration. And the challenge is lost.” He also assured that work is in progress to turn the migrant challenge into an opportunity soon. He warned that it will be a mistake to underestimate the scale of the crisis. Draghi is however confident of finding a way of sharing the financial burden of the refugee crisis.
He expressed confidence that Europe could rise above the crisis and also added that it could not afford to not rise to occasion and eventually fail in tackling the problem. Not to co-operate, he feels is not an option and that the problem will not disappear simply because European countries chose to ignore it.
Draghi says Greece has made progress
With respect to Greece, Draghi says “Europe is in a much better situation than last June.” He said that the Greece has been able to make progress with respect to reforms, and fiscal consolidation. He however did mention his concerns about the high-level of non-performing loans in Greek banks and said they needed “a process by which these loans can be sold.” He is hopeful of an agreement soon. “The sooner it’s concluded, the sooner the Greek economy can go back to normal” Draghi noted.
He is unsure about the time that Europe will take to transform the challenge it faces in the form of refugee problem into an opportunity. He added that “there is determination, and confidence. That’s the most important thing, because the size of the challenge could actually undermine the confidence and make fear prevail over any other consideration. And the challenge is lost.” He also assured that work is in progress to turn the migrant challenge into an opportunity soon. He warned that it will be a mistake to underestimate the scale of the crisis. Draghi is however confident of finding a way of sharing the financial burden of the refugee crisis.
He expressed confidence that Europe could rise above the crisis and also added that it could not afford to not rise to occasion and eventually fail in tackling the problem. Not to co-operate, he feels is not an option and that the problem will not disappear simply because European countries chose to ignore it.
Draghi says Greece has made progress
With respect to Greece, Draghi says “Europe is in a much better situation than last June.” He said that the Greece has been able to make progress with respect to reforms, and fiscal consolidation. He however did mention his concerns about the high-level of non-performing loans in Greek banks and said they needed “a process by which these loans can be sold.” He is hopeful of an agreement soon. “The sooner it’s concluded, the sooner the Greek economy can go back to normal” Draghi noted.