Brussels wants more financial integration and it wants it now

The European Central Bank president has called for further integration in the Eurozone, claiming it would lead to greater democracy and accountability.

Mario Draghi made the comment at an event in Frankfurt ahead of the grand opening of the bank, which is millions of euro over budget and years late, the Business Times reports.

He said a “quantum leap” is needed in eurozone integration to counter arguments by eurosceptic parties that the Troika of financial institutions dictate policy for those who are part of the single currency.

“It is possible to make a more direct link between decisions and responsibility,” said Draghi, who was previously the governor of the Bank of Italy.  “It is exactly the impression that there is too little accountability in Europe that populist parties often exploit.”

The calls come as the Eurozone prepares itself for a possible Grexit and Greek Prime Minister Alexis Tsipras heads to Moscow for talks with Vladimir Putin on the 8th April. US diplomat Victoria Nuland is holding talks in Greece today to head off a situation which could push Greece into Russia’s orbit as five-way talks are scheduled to try reach an agreement on the debt-ridden country.

@J_Dijsselbloem: Scenarios ready in case #Greece in July doesn’t meet the EU requirements.That doesn’t necessarily have to be a #Grexit @BNR

— EfiKoutsokosta (@Efkouts) March 17, 2015

Last week, Germany’s Finance Minister Wolfgang Schauble took to twitter to issue a stark message to the Greek people and their newly elected government on the ongoing struggle to reach an agreement on Greece’s debt restructuring, saying that ‘Democracy alone does not work’.

#Schäuble: Democracy alone does not work – it needs certain boundaries. #ECOFIN via @OpenEurope

— EfiKoutsokosta (@Efkouts) March 10, 2015

With the opening of the new bank headquarters on Wednesday, organisers are bracing themselves for around 10,000 protesters gatecrashing the ceremony.

There has been moderately good news for the single currency group, with the economic outlook for the euro area improving although today’s inflation data showed prices fell by 0.3 per cent in February, with ‘core inflation’ hitting 0.7 per cent, showing a move in the right direction as the weakened euro makes its exports appear cheaper.

The president said that the recovery must be seen as an opportunity to push through economic adjustments, saying the upturn “does not mean we should rest on our laurels”.

“The current upturn in economic conditions, which the ECB has helped to generate, must be used to push ahead with structural reforms and address the roots of the euro-area fragility,” he said, referring to the quantitative easing which was implemented.

But Ben Brettell, senior economist at Hargreaves Lansdown told said it was “clearly too soon for quantitative easing to be credited with the improvements in inflation and employment.”

“Draghi is fortunate that QE appears to be coinciding with a cyclical recovery – the programme will probably be hailed a success, but in truth the improvement in data may have still happened in its absence. In the final analysis it will make little difference. If the patient recovers, does it matter whether that recovery is due to the medicine working or a placebo effect?”