EU could have QE by next month

Graham_Devon

Mario Draghi, president of the European Central Bank, raised the prospect of monetery easing as early as next month and said the strong euro was a "cause for serious concern".

Speaking after the central bank had held interest rates, he said: "The governing council is comfortable with acting next time but before we want to see the staff projections that will come out in early June...

"There is consensus about being dissatisfied with the projected path of inflation. So there is a consensus with not being resigned to expecting this ... We have a consensus about action, but after seeing the staff projections in early June."

Asked whether this is meant the end of an era in which the ECB "never precommits" to act - a phrase often used by former ECB President Jean-Claude Trichet - he said: "We never precommit? - Well, that I think has finished a long time ago."

Nearly 6 years after the crisis, the EU looks set to start monetry easing.

Stong words. But is there any chance they will be followed by any action? Where are Germany on this?

http://www.telegraph.co.uk/finance/economics/10816626/Draghi-raises-prospect-of-ECB-simulus-next-month.html

Masomnia

I wouldn't be surprised, with inflation how it is. It's interesting that they're being that they feel the currency is too strong and a bit of QE might soften it a bit, I think here they skirted round that aspect of it!

Bad news for us, I'd say.

chucky

Masomnia wrote: »

I wouldn't be surprised, with inflation how it is. It's interesting that they're being that they feel the currency is too strong and a bit of QE might soften it a bit, I think here they skirted round that aspect of it!

Bad news for us, I'd say.

If this happens it would be interesting to see if the BoE would increase rates...

Thrugelmir

Graham_Devon wrote: »

Nearly 6 years after the crisis, the EU looks set to start monetry easing.

Stong words. But is there any chance they will be followed by any action? Where are Germany on this?

One policy does not fit all when it comes to Europe. Unless political, economic and fiscal policies totally align. The EU elections may be a wake up call.

Generali

Masomnia wrote: »

I wouldn't be surprised, with inflation how it is. It's interesting that they're being that they feel the currency is too strong and a bit of QE might soften it a bit, I think here they skirted round that aspect of it!

Bad news for us, I'd say.

Not necessarily. A strong Eurozone will import more and short term exchange rates don't impact hugely on trade anyway.

Perhaps it's better to have a smaller chunk of a bigger market.

It's all storing up more problems for Germany of course but they seem to think that their huge trade surplus is a good thing:rotfl:. The funniest thing is that most of the rest of the world believes them!

ManAtHome

Set to start monetary easing...? Well, I suppose at least the ECB balance sheet is dropping back a bit (unlike you know who, and you know who, and you know who, and possibly others...).

ECB non-QEish stuff http://goldsilverworlds.com/wp-content/uploads/2013/02/ECB_Balance_Sheet_Shrinking_January_2013.gif (only up to Jan 2013, sure you can find more up-to-date stuff if can-be-bovvered).

Thrugelmir

Generali wrote: »

Not necessarily. A strong Eurozone will import more and short term exchange rates don't impact hugely on trade anyway.

With around 26% unemployment in Spain and 12% across the EU. There's still many problems to overcome. Before the economy will show any signs of strong growth.

purch

Generali wrote: »

A strong Eurozone will import more and short term exchange rates don't impact hugely on trade anyway.

Perhaps it's better to have a smaller chunk of a bigger market.

Yes, usually a fact that get's lost in the rush for instant news and opinion.

The exchange rate movements between GBP/EUR over the last few years are not huge in any case, and have taken place over extended periods without excessive sharp corrections, so overall their effect on trade will have been miniscule.

Now if GBP/EUR went to 2.00, :eek: then we might have a problem, but a slow move back towards 1.35 is not something to get yourself into a tizzy about.

worldtraveller

Mario Draghi is preparing the world for quantitative easing (QE) in Europe.

In an interview with German-language newspaper Handelsblatt, European Central Bank president Mario Draghi said the ECB is making "technical" preparations for a change in its asset purchase program.



Business Insider UK

Thrugelmir

Be interesting if Greece votes in an anti austerity Government later in the month. Which then decides to default on Greece's debt and the austerity measures imposed by the EU/IMF.

Seems to be wide support.

The Greek cleaning ladies fighting back against austerity

On the picket line outside the Greek Finance ministry, 600 cleaning ladies have inspired a nation to reject austerity

http://www.telegraph.co.uk/news/worldnews/europe/greece/11318055/The-Greek-cleaning-ladies-fighting-back-against-austerity.html

carslet

Announcement soon that they are going print 500bn euro

European Central Bank staff presented policy makers with models for buying as much as 500 billion euros ($591 billion) of investment-grade assets, according to a person who attended a meeting of the Governing Council.