A purchasing program for government bonds by the European Central Bank (ECB) in 2015 will not lead to a revival of the economy in the eurozone. That economists think the eurozone, gauged by the Financial Times.
Quantitative easing
26 of the 32 economists surveyed expect the ECB in 2015 will move to quantitative easing. Thus, the ECB would follow the path of the other major central banks in the world, since the crisis all large amounts of government bonds are going to buy.
The faltering economic recovery in the euro zone and the low rates of inflation, have sparked fears of a new financial crisis in the euro countries. The pressure on policy makers of the ECB is increasing to, against the wishes of Germany, to proceed with the purchase of government bonds.
Mario Draghi
Reuters
Last week hinting ECB President Mario Draghi in an interview with the German newspaper Handelsblatt that the central bank will soon expand its purchasing program to include bonds. Partly on these statements, the euro fell Friday by 0.5% against the dollar, to $ 1.205, the lowest level since mid-2010.
Doubt
However, economists doubt the value of such buy-back program. The majority of respondents in the survey of the Financial Times believes that both economic growth and inflation will remain low in 2015, even if the ECB decides to QE
” It will increase inflation and slightly lower the euro, but it is not game changer , “says Dario Perkins, of Lombard Street Research . Jörg Krämer of Commerzbank indicates that quantitative easing will be especially beneficial to banks and finance ministries in countries with large public debt, such as Italy, as it will lead to lower interest rates on government bonds.
Also, chief economist Carsten Brzeski at ING DiBa thinks it is not a panacea.” Kwanitatieve easing will have an impact as according to him mainly governments at the same time start an investment program, which is financed with new debt. ‘It is doubtful whether that will ever happen in the eurozone. “
No comments:
Post a Comment