Mario Draghi Took A Not-So-Subtle Swipe At Germany Without Actually Mentioning It By Name

In a lot of ways Draghi didn't move too far from what he's previously said: in short, that major structural reforms must come first.

But he made one major interjection that's going to be turning heads in Berlin.

Draghi has been increasingly open about his view that some of the Eurozone economies should be spending more, a theme which came out of his speech at Jackson Hole. After a barrage of questions from veteran FT correspondent Martin Wolf on Germany, Draghi conceded:

"For governments that have fiscal space, then of course it makes sense to use it. You decide to which country this sentence applies."

There was laughter in the room, but they're unlikely to take it well at the Bundesbank or the higher parts of German government, which are committed to a balanced budget. That's the most open intervention in favour of fiscal easing from the ECB President to date. The euro's down 0.50% against the dollar following the comments, which imply a continually dovish stance.

Draghi quoted a letter from John Maynard Keynes to FDR, sent in 1938, which expressed a worry that the President was putting economic reforms ahead of economic recovery.

Despite the reference, Draghi said that "we face the opposite concern to that expressed by Keynes. Without reform, there can be no recovery," flagging up the eurozone's massive structural flaws.

But it's also the letter which contains this passage, dismissing the ability of monetary injections to boost the economy alone, and pushing for a significant fiscal expansion:

Of course, it could be an innocent reference. But Draghi knows how closely his speeches are watched, and nobody should ignore the possibility that he's dropping a small hint.