European Central Bank President Mario Draghi has struck back at the Trump administration, forcefully rejecting accusations that Germany is manipulating the euro and warning that banking regulations must not be rolled back.
“We are not currency manipulators,” Draghi said Monday at a hearing in the European Parliament. “Our monetary policies reflect the diverse positions in the economic cycle of the eurozone and the United States.”
Draghi went on to quote a document published by the U.S. Treasury that undermines claims made by Trump adviser Peter Navarro, who last week accused Germany of using a “grossly undervalued” euro to hurt the U.S. economy.
“In its latest report to congress released on October 14, 2016, the U.S. Treasury stressed that Germany does not manipulate its currency,” Draghi said.
The report on foreign currencies notes that Germany maintains a trade surplus with the U.S., but it also says that ECB has not recently intervened in currency markets. German Chancellor Angela Merkel has also rejected the manipulation claim.
Draghi also reacted to Trump’s plans to weaken financial regulations.
Trump has vowed to dismantle the Dodd-Frank reform of Wall Street. The law was enacted in 2010 to safeguard against another financial meltdown.
The real estate developer has called the law a “disaster” and ordered regulatory agencies to come up with alternatives.
Draghi said that dismantling regulations was a very bad idea.
“The last thing we need at this point in time is a relaxation of regulation,” he said. “Nowadays, financial intermediaries are stronger than they were before the crisis, so the idea of repeating the conditions that were in place before the crisis is something that is very worrisome.”