In a surprise move. European Central Bank (ECB) has decided to cuts their interest rates from 0% to 0.05% and unveils a new stimulus plan to tackle deflation.
The bank will also expand its quantitative easing programme from €60bn to €80bn a month.
The ECB also decided to further cut its bank deposit rate, from minus 0.3% to minus 0.4%.
Conclusion: Whom saves Eurozone to stagnation? ECB or Super Mario Draghi.
The European Central Bank (ECB) has announced new measures to boost eurozone economy. It cutting a key interest rate and extending its stimulus programme.
The overnight deposit rate was cut to -0.3% from -0.2%, to push banks to lend instead of parking money at the ECB.
The ECB also extended its monthly €60bn stimulus programme by six months to March 2017, but left its main interest rate on hold at a record low of 0.05%.
ECB president Mario Draghi told a news conference that its bond-buying stimulus programme, or quantitative easing (QE), was working.
Conclusion: Even Draghi try to recovery eurozone economy again.
After a long night meeting among heads of European Central Bank (ECB) Mario Draghi and International Monetary Fund (IMF) Christine Lagarde with German Chancellor Angela Merkel and French President Francois Hollande to discuss the Greek crisis in Berlin. Greece’ PM Alexis Tsipras vows a realitisc debt deal proposal.
He says he has issued a “a realistic proposal” to its international creditors in an attempt to secure a deal over its debts.
“We have submitted a realistic plan for Greece to exit the crisis,” he said.
Tspiras said the plan included “concessions that will be difficult”.
Conclusion: Will Tsipras save Greece from this?
After weeks of rumours. European Central Bank (ECB) announces their stimulus programme or QE (Quantitative Easing). It will inject billions of euros into the ailing eurozone economy.
The ECB will purchase bonds worth €60bn per month until the end of September 2016.
The ECB has also said eurozone interest rates are being held at the record low of 0.05%, where they have been since September 2014.
ECB president Mario Draghi said the programme would begin in March.
He told a news conference the ECB would be purchasing euro-denominated investment grade securities in the secondary market.
He said the programme would be conducted “until we see a sustained adjustment in the path of inflation”, which the ECB has pledged to maintain at close to 2%.
The value of Euro has droped after the QE announcement. It fells a cent against the US dollar to $1.1511 before recovering slightly.
Conclusion: Will Europe save by Draghi and his QE?
Europe braces tough decisions on economy. It was threats by deflation, debts and recession Now, Advocate General Cruz Villalon said the ECB’s Outright Monetary Transactions (OMT) programme is compatible, in principle, with EU law.
But he said that if the programme is implemented, its compatibility will depend on certain conditions being met.
The bond-buying is aimed at avoiding a break-up of the euro, but has faced a legal challenge from Germany.
Germany’s Federal Court challenged the OMT’s legality in the European Constitutional Court of Justice, arguing the ECB was acting beyond its mandate, effectively financing government deficits.
In his opinion, published on Wednesday, Advocate General Villalon argued that the ECB must have a broad discretion when framing and implementing the EU’s monetary policy.
He said it would first have to spell out its justification for any bond-buying programme and not be involved in any direct aid programme to any eurozone member state involved.
He also warned that the courts lacked the expertise and experience of the central bank in this area and should be careful about criticising the ECB.
Conclusion: More problems for undecided Europe
Deflation is a curse on Europe. The energy prices has fallen 6.3% on last December. It’s put European Central Bank under pressure for adopting stimulus plan. Conclusion: ECB president Mario Draghi and his dilemma for save Europe.
Europe has new problem. Euro has fall down. The European currency fell by 1.2% against the dollar to $1.1864, marking its weakest level since March 2006, before recovering slightly to $1.19370.
The drop follows ECB president Mario Draghi’s comments indicating the bank could soon start quantitative easing in interview for German newspaper Handelsblatt.
On Saturday, Germany’s Der Spiegel magazine said the German government believes the eurozone would be able to cope with a Greek “exit” from the euro, if the Syriza party wins the Greek election.
Reacting to Der Spiegel’s report, a spokesman for German Chancellor Merkel said there was no change in German policy and the government expects Greece to fulfil its obligations under the EU, ECB and IMF bailout.
French president Francois Hollande also commented, saying it was now “up to the Greeks” to decide whether to remain a part of the single currency.
“Europe cannot continue to be identified by austerity,” he added, suggesting that the eurozone needs to focus more on growth than reducing its deficit.
Conclusion: Draghi and his stupid comments.