First published: Nikkei Asian Review, 23/01/15
The European Central Bank has finally fallen into line with its peers in the U.S., U.K. and Japan by launching its own program of quantitative easing.
ECB President Mario Draghi on Thursday announced that the Eurosystem of the EU member states’ central banks would start in March to buy public and private bonds at the rate of 60 billion euros ($68 billion) a month until mid-September 2016 or, he noted, “in any case until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term.”
On the surface it all sounds pretty impressive, even if a few years late. It is unquestionably a significant step and worth taking. On closer scrutiny, though, while the ECB will likely be able to achieve some intermediate financial goals, it will fail by acting alone, without the support of member governments, to realize its grander and more important economic goals. Amid concerns expressed by some Eurozone members, notably Germany, the ECB is also potentially moving further into political quicksand that could undermine its authority….“more:”
