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Words carry meaning, particularly when they are spoken by the President of the European Central Bank. He delivered his plea for a more active and coordinated budgetary policy, backed up by a European political union to drag the continent out of stagnation, at the annual summit of the world’s top central bankers in Jackson Hole (Wyoming, 22 August 2014); his criticism of overzealous austerity certainly made people sit up and take notice. In his previous speech (Frankfurt, 7 August) Mario Draghi had mentioned “heightened geopolitical risks” which “may have the potential to affect economic conditions negatively, including through effects on energy prices and global demand for euro area products”.
In both cases Mario Draghi continued his strategy of “forward guidance” for...
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