The European Central Bank announced Thursday that from March to September 2016 will buy 60,000 million euros a month of public and private-country eurozone bonds. The sum of 1.140 billion euros, is a historic turning point in European monetary policy following the monetary expansion which launched in 2009 the US Federal Reserve. Each country will play him as their weight in the Eurozone. Germany, for example, 26%, Spain will be 12%, Greece 2%.
The ECB President Mario Draghi Italian, had to press the button on the little machine to print money because Eurozone remains stagnant, despite criticism from Germany, which demands continue settings and believes that monetary expansion in southern Europe helps curb the settings.
The ECB aims to keep inflation about 2% is not met: as prices fall 0.2%. Increasing the money supply must push a few tenths and reduced inflation and country risk, in addition to deepen the fall of the euro, which yesterday was trading at $ 1.14 when September came to 1.30 per dollar.
The announcement was received positively by the markets. The main European stock markets closed this afternoon with significant increases.
Europe loses step. In 2009, at the height of the crisis, the US Federal Reserve initiated a massive program of bond purchases. It worked, the economy stabilized and started to create jobs. US and recovered the jobs lost in the crisis and reduced fiscal red. The US unemployment in 2009 was 9.8% and 9.7% Eurozone. Today they are, respectively, 5.6% and 11.5%. USA. grew at the end of the year at an annual rate that grazed 5% and the Eurozone barely reached 1%.
Draghi had tried everything, always trying to tie his hands Berlin. He began lowering interest rates to 0.15% carry them to the progressive decline in inflation and stagnation of credit. Then he bought secured to the bench to cheer the credit assets. It was almost useless.
Then opened the open bar for banking, loans that exceeded one billion euros, with maturities of up to three years and an interest rate of 1%, but banks did not use the money to revive credit but to buy more government debt and even to deposit at the ECB itself and taking a similar interest. Draghi then had to charge them for Save them money. He managed to reduce country risk, but the money never reached the real economy.
Meanwhile, inflation was falling until November slipped into negative territory with a drop of 0.2%. With the Eurozone barely grow 1%, unemployment stuck at 11.5% and debts accumulate, a drop in persistent deflation would be the last straw that would be missing from the Eurozone.
Draghi arrives afternoon and now the question is whether also comes bad, because interest rates near 0% may question a bond purchase plan nearly a billion euros generate inflation beyond a few tenths.
Germany tried to stop Draghi because he believes is a massive and southern Europe covert rescue. From Berlin seems that monetary policy of the euro would not accommodate 19 countries but the German historical traumas of the hyperinflation of the Weimar Republic. Draghi took the decision yesterday to mark his legacy and the path of the European economy in coming years.
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