Draghi’s Lieutenants Spar as ECB Braces for Exit Strategy Debate

Mario Draghi’s right-hand man and left-hand man may have some differences to sort out.
Peter Praet and Benoit Coeure, arguably the two most influential members of the European Central Bank after the president, have struck contrasting tones about how to communicate the institution’s intentions.
Both are wary of how markets will react to the ECB’s first step toward unwinding stimulus, but while Praet advocates caution and maintaining the easing bias enshrined in current guidance, Coeure has warned that moving too slowly could eventually lead to a bigger shock.
The differences are subtle but, as Draghi works to build a consensus ahead of the June 8 policy meeting, they go to the heart of the debate over unwinding a program that has dominated the euro area for years. Get it right and the currency bloc would make a smooth transition to normality; get it wrong and the market tumult would push that goal ever further into the future.

This post was published at bloomberg