Another big financial news of the week, the ECB uses the same method as in the USA, the money counter against debt!
Analyzes: http://www.france5.fr/emissions/c-dans- ... 015_296635
Not sure that the 2 decisions are not linked ...
To great ills, great remedies. At the end of the meeting of the Board of Governors of the European Central Bank, Mario Draghi announced this Thursday the launch of a historic offensive: the ECB will buy back 60 billion euros of public and private debt per month, until September 2016. Unprecedented in the euro zone, this program called "easing quantitative "aims to distance Europe from the threat of deflation and a crisis combining sluggish growth, falling prices and unemployment.
"We are in a situation where we should lower the key rate even further [the cost of borrowing money, editor's note], but this is no longer possible", explained the boss of the ECB in an interview with the German weekly Die Zeit, published last week. Already at zero, the rates cannot effectively turn negative. "At that point, we have to resort to unconventional measures, which is to change the size and composition of the ECB's balance sheet." What specialists call "quantitative easing" (QE). Clearly, like the United States, Japan and Great Britain, and after months of tug-of-war with Berlin, Mario Draghi has decided to run the printing press, and to inject 1140 billion euros to boost growth in the euro area.
Welcomed on the markets, the announcement of this plan to buy back sovereign debt has already had a definite effect on the CAC 40 and the other major European indices on the rise this Thursday afternoon. Later than the others, this intervention seeks in particular to push investors towards riskier assets, likely to help support the economy of the euro zone. But the boss of the ECB has already warned the States of the Union: his plan will not work if European countries take the opportunity to slow the pace of structural reforms or go into debt more.