central bankers take up arms against protectionism
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice
Emiratesvoice, emirates voice
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice

Central bankers take up arms against protectionism

Emiratesvoice, emirates voice

Emiratesvoice, emirates voice Central bankers take up arms against protectionism

Reserve Bank of Australia Governor Philip Lowe
Frankfurt am Main - AFP

Officially concerned only with monetary policy, central bankers the world over are weighing in on political debates as fears of economic damage from protectionism mount.

"Protectionism will only lead to a loss of prosperity for all," warned European Central Bank board member Yves Mersch on Friday.

The Luxembourger's words came just three weeks after US President Donald Trump took office with a speech that hammered home his "America first" stance, fuelling concern that the US billionaire plans to shake up global trade rules.

Even before the inauguration, Trump was talking up tariffs, telling a German interviewer he would slap a border tax on BMW cars if the firm went ahead with the construction of a plant in Mexico.

"It surely can't be the case that the way to build liberal prosperity is to build barriers between one another," Reserve Bank of Australia governor Philip Lowe said last week.

"Uncertainty surrounds the direction of US macroeconomic policies with potential global spillovers," the Reserve Bank of India worried in a statement last week after leaving its main interest rates unchanged.

"Global trade remains subdued due to an increasing tendency towards protectionist policies and heightened political tensions," it noted.

- Fragile independence -

In many advanced economies, central banks are free of government control, using their independent economic judgement to set interest rates and safeguard financial stability while remaining above the political fray.

But "central bankers have been advancing on to ground that isn't really theirs for years, offering cautious policy recommendations," Pictet bank economist Frederik Ducrozet told AFP.

Now "a further step has clearly been taken", he said, as monetary policymakers brace for the uncertainties of Trump's economic policies and the upcoming Brexit divorce negotiations, expected to take Britain out of the EU's single market for goods, services, capital and labour.

Bank governors' newfound readiness to pass comment is more a reflection that protectionism "wasn't much of an issue to talk about until recently" than staking out of a political position, economist Ben May of Oxford Economics told AFP.

"Central bankers are always happy to talk about things where economic theory is clear," May said. "The conventional wisdom in economics is that trade is good for the economy."

As in Britain, where voters had "had enough of experts" according to Brexit campaigner Michael Gove, governments may disagree with their central bank's advice for reasons unrelated to economics and take actions that limit trade.

- Long European summer -

Central bankers are at odds however about how high and far the global protectionist wave may rise.

"I don't think protectionism is likely to spread vigorously and widely in the world," Bank of Japan governor Haruhiko Kuroda said in January.

Meanwhile, German central bank president Jens Weidmann warned last week of "mounting scepticism over globalisation, a sentiment by no means confined to the United States," labelling Trump's rhetoric "very worrying".

"Barriers and exclusion would be the wrong response," Weidmann added.

Both Germany and Japan stand to suffer if the US goes the protectionist route, as Trump has lashed out at both with accusations they are manipulating exchange rates to make their exports cheaper.

While the US is Germany's biggest export customer, Europe's largest economy would be even worse off if its EU neighbours turned away from the bloc's free-trading foundations.

Europe faces several crucial elections this year, including in the EU's traditional power couple France and Germany.

Anti-euro and anti-EU parties are likely to gain ground in France, Germany, the Netherlands, and possibly Italy in 2017, with eurosceptic parties promising referendums on the single currency if they win in Italy and France.

The ECB's Mario Draghi insisted to an Italian lawmaker last week that "the euro is irrevocable" as he faced questions from a European Parliament Committee.

But in the political trenches, it will be up to mainstream politicians to defend the economic consensus rather than experts like the ECB president.

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

central bankers take up arms against protectionism central bankers take up arms against protectionism

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

central bankers take up arms against protectionism central bankers take up arms against protectionism

 



GMT 09:54 2018 Wednesday ,24 January

'Friendly and kind' N. Korean skaters

GMT 09:36 2017 Thursday ,07 December

Heidy Karam’s contract to present talk show close

GMT 10:50 2012 Friday ,20 January

Dusty weather expected in UAE on Friday

GMT 09:35 2018 Saturday ,13 January

New Zealand bat first in third ODI against Pakistan

GMT 10:48 2017 Saturday ,23 December

Meryl Streep's brand under threat

GMT 06:53 2017 Thursday ,11 May

17th Doha Forum To Begin Sunday

GMT 10:30 2017 Thursday ,23 November

Reports underline proliferation of weapons in Arab world

GMT 07:46 2017 Monday ,30 October

Catch it early, treat it early and move on

GMT 08:05 2015 Tuesday ,17 February

Conan O'Brien is first late night host to film in Cuba

GMT 16:17 2018 Thursday ,30 August

Five Saudi women pilots granted GACA licences

GMT 06:30 2018 Tuesday ,23 January

Knee surgery delays Pocock's return to Super Rugby

GMT 09:52 2018 Sunday ,21 January

American Coleman breaks 60m indoor world record

GMT 17:20 2018 Tuesday ,16 January

Joe Root lines up for his first IPL auction

GMT 09:46 2017 Monday ,30 January

Results of German first-division soccer league

GMT 13:14 2017 Wednesday ,03 May

Ericsson and Etisalat conduct 5G

GMT 14:00 2018 Saturday ,13 January

Qatar, UAE clash over alleged airspace violation

GMT 07:27 2018 Saturday ,13 January

Trump 'desperate' to undermine nuclear
Emiratesvoice, emirates voice
 
 Emirates Voice Facebook,emirates voice facebook  Emirates Voice Twitter,emirates voice twitter Emirates Voice Rss,emirates voice rss  Emirates Voice Youtube,emirates voice youtube  Emirates Voice Youtube,emirates voice youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

emiratesvoieen emiratesvoiceen emiratesvoiceen emiratesvoiceen
emiratesvoice emiratesvoice emiratesvoice
emiratesvoice
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
emiratesvoice, Emiratesvoice, Emiratesvoice