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Michael Probst

Pressure is mounting on Mario Draghi to turn on the cash taps

Weak inflation data from the EU could force the Italian’s hand.

EUROPEAN CENTRAL BANK president Mario Draghi is coming under increasing pressure to resort to radical cash injections to ease deflation fears stalking the currency bloc.

Latest economic data from the central European Union statistics agency show that spiralling energy costs pulled consumer price inflation down to just 0.3%, some way short of the ECB’s mandated target of around 2% inflation.

Analysts said that the stubbornly low inflation data is proof that Mario Draghi’s June attempt to solve the inflation problem with ultra-low interest rates and a €400 billion targeted stimulus package has failed.

Sluggish performance by the Eurozones leading economies, including France and Germany, has further increased pressure on Frankfurt officials.

HICP Eurostat Eurostat

In a landmark speech at the economic symposium in Jackson Hole, Wyoming last week, Draghi indicated that he would be employing a freer policy from here on out, with observers now expecting a significant announcement after next week’s monthly ECB governing council meeting.

The German finance minister Wolfgang Schaeuble said that the ECB does not have the instruments to fight deflation at the moment.

Alasdair Cavalla, an economist with the Centre for Economics and Business Research in London, said that the low figures “will further increase pressure on the ECB to unleash a quantitative easing programme to stimulate price rises and ultimately spending”.

He said that the main opposition to any movement  would come from the German central bank, the Bundesbank, which could luse legal provisions to try and block it.

He added: “However, the gravity and seeming intractability of the problem mean that these previously unthinkable options are now on the table.”

Merrion capital head economist Alan McQuaid said that a QE package could be pushed through, although it was unlikely to happen next week.

Any QE package would provide a further tailwind for the relatively bouyant Irish economy, he said, with a weakening of the euro a major bonus for the large export sector here.

Read: This morning, major European economies hit the slow lane. Here’s what it means>

Read: ECB action could be ‘too little, too late’ as eurozone economies hit the slow lane>

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    Mute Catherine Mc
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    Jun 3rd 2017, 3:01 PM

    The Irish Imigration Centre Dublin.

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    Mute Martin Flood
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    Jun 3rd 2017, 3:43 PM

    @Catherine Mc: *Emigration

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    Mute Catherine Mc
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    Jun 3rd 2017, 4:10 PM

    @Martin Flood:
    Thank you Martin for correction.

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    Mute Alois Irlmaier
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    Jun 4th 2017, 1:52 AM

    @Catherine Mc: The nearest loo if you have a full bladder lol.

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    Mute bopter
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    Jun 3rd 2017, 3:44 PM

    How can one win an architecture award just on good location? The Kilsallagh one and the Marconi station are just good locations with nothing of architectural interest.

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    Jun 3rd 2017, 3:08 PM

    The Royal Hospital, Kilmainham.

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    Jun 3rd 2017, 3:44 PM

    Merchants quay Cork *winkwink*

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    Jun 3rd 2017, 3:54 PM

    Petition for Liberty Hall!!

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    Jun 3rd 2017, 4:07 PM

    @Alan O’Rourke: and the Twin Towers in Poolbeg !

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    Mute Ian Moloney
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    Jun 4th 2017, 1:12 AM

    The public library in Bantry Co Cork incorporates the adjacent twisting road and river ingeniously.

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    Mute iMoan Brutal
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    Jun 3rd 2017, 9:58 PM

    Most of them are hidious (especailly the modern ones) and completely impractical, (flat roofs in Ireland just means the designer has no grasp on reality) Are the older better quality desgins going to the original designers, or the nesw ones whove just stuck a few panes of glass in and cleaned the stonework?

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    Jun 4th 2017, 12:52 AM

    Wanderly wagon?

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    Jun 4th 2017, 1:55 AM

    Knock Chapel?

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    Jun 4th 2017, 1:53 AM

    http://highlanes.ie/
    Highlanes Municipal Art Gallery, Drogheda?

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    Mute Bob McShane
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    Jun 4th 2017, 12:50 AM

    Wanderlust wagon?

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