Draghi facing the parliament

Strasbourg, France (dpa) - "It is true that monetary policy has done a lot to preserve and enhance this fragile growth, but it seems that unconventional monetary policy is reaching its limits," said European People‘s Party‘s Danuta Maria Huebner of Poland. "We all know that there may be collateral damage if this negative interest rate policy remains with us for too long," said Progressive Alliance of Socialists and Democrats‘ Pedro Silva Pereira of Portugal. "In the light of what has happened with Brexit and the election of Donald Trump in the US, we may find ourselves in a period of speculation on the sovereign debt markets," Pereira said. Members of European Parliament gathered in the eastern French city of Strasbourg on Monday for the start of a four-day plenary session. Draghi and the ECB, responsible for maintaining price stability in the 19 countries of the eurozone, have faced criticism for keeping the bank‘s benchmark refinancing rate at zero and its deposit rate at minus 0.4 per cent as part of efforts to spur economic growth and head off deflation. Critics of Draghi‘s monetary policy have been loudest in Germany, where the low rates have hurt the country‘s large population of retirees and savings account holders. Draghi told lawmakers to consider the economic improvement in the euro currency bloc, with EU gross domestic product now higher than it was before the financial crisis that was triggered in 2008. "If we look back, things are better today than they were before," Draghi told lawmakers. "And all this in spite of the serious geopolitical risks that are maturing and have matured, especially this year," Draghi said. "Low interest rates are a consequence of low growth and low inflation all over the world, they are not the creation of the ECB," Draghi said in response to the parliamentary debate. "The policy rates by the ECB have to be low for stimulating growth, and when you have higher growth and higher inflation, the policy rates of the ECB will also increase," Draghi said. The eurozone economy grew 0.3 per cent quarter-on-quarter and 1.6 per cent year-on-year in the third-quarter of 2016, according to final data released by Eurostat this month. Growth has moderately recovered across the eurozone but has been uneven among individual member states, the European Commission said last week. European lawmakers are due to debate and vote on several other issues during the plenary, including EU-Turkey relations, national emissions caps and defense policy.