Besides, many people benefit from low interest rates as they are also homebuyers, taxpayers, entrepreneurs and workers whose companies are benefiting. BILD: In Germany the adverse effects are predominant. Making provision for retirement is becoming increasingly difficult… Draghi: Remember, what counts is what you earn on savings in real terms, i.e. interest minus inflation. This is higher today than it was on average in the 1990s. At that time you might have had a higher interest rate on your Sparbuch (savings account), but we often had an inflation rate that was higher still. So the interest looked good at first, but the real return was in fact much lower. Moreover, people can influence how much they get on their savings even in times of low interest rates. They don’t just have to keep the money in savings accounts but can invest in other ways. The Bundesbank has recently shown that the average return on all German household assets is close to 2%. BILD: So, are the German savers themselves to blame? Draghi: No. But there are alternatives when investing savings. In the United States savers had to face seven years of zero interest rates. The financial system – banks and insurers – nevertheless still worked. Money was invested in a variety of ways which in the end enabled a decent return. BILD: Of all people, German Finance Minister Wolfgang Schäuble, who has supported you for years, is now among your strongest critics, saying your policies are damaging savers and thereby strengthening populist parties.
That makes it all the more important to resist every kind of nationalism or isolationism. Both are however on the rise. That worries me a lot. BILD: In the United Kingdom there will even soon be a vote on a complete withdrawal from the EU… Draghi: I cannot and do not wish to believe that the British would vote to leave, because we are stronger together. But if they do, it should be clear to them that they would lose all the benefits of the Single Market. BILD: If you had a spare wish for Chancellor Merkel, what would that be? Draghi: That she continues to fight for Europe. BILD: And one last question. The Bundestag has invited you again: will you go? Draghi: Of course. It will be my pleasure. BIS central bankers’ speeches  3