File - Draghi is placing more emphasis on fiscal stimulus than austerity.
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Prodding governments to do more to boost demand and hinting at European Central Bank action to go along with it marks a major shift in ECB chief Mario Draghi's eurozone policy away from a focus on austerity toward reviving growth.Eurozone inflation data Friday is expected to slow to 0.3 percent – far below the ECB just-under-2-percent goal.Draghi also used his speech at the Jackson Hole gathering of central bankers to point out that "financial markets have indicated that inflation expectations exhibited significant declines at all horizons" in August.He pointed to falls in the so-called five-year, five-year forward breakeven rate – the ECB's preferred measure of the inflation outlook, which measures roughly where investors see five-year inflation rates in five years' time. This raises the stakes for the Council's Sept. 4 policy meeting, with financial markets growing more excised about the prospect of the ECB embarking on a policy of quantitative easing – essentially printing money to buy assets.An intense policy debate can be expected at the meeting, though it is probably too early for the ECB to embark on QE. The ECB is coming under pressure from its peers to do more.
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