ECB to start €1tn bond-buying scheme to revive eurozone economy
The European Central Bank (ECB) plans to launch a massive bond-buying scheme worth one trillion euros (USD 1.16 trillion) in an attempt to resuscitate the eurozone’s staggering economy.
According to reports on Thursday, the ECB will start the program, also known as quantitative easing (QE), in March and keep it up until the end of September 2016.
The program would include purchasing government bonds worth up to 60 billion euros per month, the reports added.
The ECB move came after the eurozone’s inflation rate became negative in December 2014, raising fears about the imminent danger of falling prices in the region.
ECB President Mario Draghi said the QE project will be pursued “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 percent.”
Meanwhile, German Chancellor Angela Merkel stated that the ECB’s financial package should not deter governments to enact reforms in a bid to revive the ailing eurozone economy.
“No matter what sort of decision the ECB will take, we should not become diverted from the fact that we as politicians need to put a framework for recovery in place,” Merkel said in an address to the World Economic Forum in Davos, Switzerland, on Thursday.
“Europe continues to be confronted by great challenges. We have often talked about the debt crisis.... We have this somewhat under control but we are not out of the woods yet,” she warned.
Europe plunged into financial crisis in early 2008. The threat of insolvency has plagued heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland, and Spain.
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