Since the early summer, Mario Draghi and his allies among the European Central Bank top brass have been laying the groundwork for new stimulus. Until recently, markets expected a punchy monetary package from this week’s ECB meeting, but hawkish talk from other central bankers in the last few weeks has muddied the picture.
In the disagreement within the ECB on what the economy needs, the doves have the better case, not least because the eurozone has only faced one of the three trade shocks about to hit it. But there is another reason why the hawks should rally behind the bank’s president this time round: it is in their own professed interest to do so.
Monetary hawks often see themselves as guardians of orthodoxy. So let them take inspiration from a much older bastion of orthodox thinking: the Vatican, which admits an advocatus diaboli to oppose the canonisation of putative saints. The analogy is not as far-fetched as all that: Bundesbank president Jens Weidmann has cited Mephistopheles’ alluring call for money-printing in a warning against it. In that spirit, here is how a monetary devil’s advocate might address the hawks at the ECB.