SPAIN: Causes and effects of new stimuli Draghi – EntornoInteligente

SPAIN: Causes and effects of new stimuli Draghi – EntornoInteligente

ABC of Spain 2 / How much money injected by the ECB in the system

Predictably the ECB announced an injection of at least 500,000 million euros?. And is that a lower amount would be considered insufficient by investors, causing dissatisfaction and therefore an unwanted reaction in the markets. Moreover, this amount would be in line with the plans of the body to raise its balance with different measures approximately one trillion.

How to carry out the purchase of public debt?

Germany he opposed the purchase of government bonds by the ECB; and where to do it, rejected any plan that sounded a debt mutualisation countries. To overcome this opposition, Mario Draghi could make them the national central banks that take these purchases, rather than the ECB. If you do, to Spain he would play for his weight in the Eurosystem, 60,000 million.

alienate the specter of deflation in the Eurozone?

The evolution of prices, which in 2014 fell 0.2% in the eurozone and 1.1% in Spain, along with weak growth in the area, is what has led the ECB to this end. By putting more money in circulation increased credit occurs and therefore investment and consumption, thus raising prices.

What benefits Spain have more inflation?

Low inflation is good for our country because, at a time of wage moderation remains disposable income. It also allows the country to gain competitiveness against other European partners. However, low inflation makes it difficult to pay the debt, both public and private, one of the major macroeconomic imbalances in Spain and other European countries. Inflation by raising the debt burden on GDP or income and payment is made more bearable diluted

How does the public accounts and the private sector?

<. P > The types of public debt are already minimal, but this measure may further cheapen the cost of financing the state and give a respite to the coffers. If in addition a portion of that debt is to the portfolio of the ECB, investors could invest excess liquidity to the private sector in the form of credit, capital or buying corporate bonds. In addition, the measure should depreciate further euro, favoring exports of the single currency area, including Spanish products.

Information ABC of Spain 2