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In Europe 22nd January 2015

QE European style: €60bn monthly bond-buying until Sept 2016

MADRID | By Ana Fuentes | Amid huge market expectation, ECB’s president Mario Draghi unveiled THE operation aiming to spur growth in the eurozone: the European QE will consist of €1.1tn sovereign bonds purchases, or €60bn a month until September 2016, beginning in March. A crucial move in exchange for low risk sharing (only 20% of bonds purchased by ECB, 80% by national central banks; and Greek bonds are expected to remain out). The euro touched an intraday low of  1.1451 dollars.

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In Europe 22nd January 2015

“NCB risk bearing should be traded-off against a big QE”

MADRID | By Ana Fuentes | Hours before ECB’s president Mario Draghi unveils its big easing program, we spoke to think tank Bruegel central banks’ expert Silvia Merler about an eventual national risk bearing. It could be a way to make QE more acceptable by Germany, she believes, although “it should be traded-off against a significant size” (meaning more than the €50bn purchases per month some market watchers are talking about).

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In Europe 22nd January 2015

ECB’s time for truth

MADRID | By Ana Fuentes | It’s been the talk of the town for months, driving up demand for government bonds in the eurozone, pushing yields to record lows and heating the debate among market makers. And yet nobody knows the scope of the European Central Bank’s next move. The much-awaited quantitative easing (QE) program is expected to be officially announced after 14.30CET today and include controversial sovereign bond purchases of €50-70billion euros per month until the end of 2016. Is the ECB late? Will the ECB manage to spur growth in the eurozone with that amount? 

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In Europe 21st January 2015

Lithuania’s central bank governor: “There’s no reason to doubt euro area future”

STRASBOURG | By Alexandre Mato | After adopting the single currency on 1 January 2015, the transition period of dual circulation has finished for Lithuania, the country thus becoming the 19th euro area member. Vitas Vasiliauskas, the Governor of The Bank of Lithuania, spoke to The Corner in an exclusive interview before the ECB’s crucial meeting on 22 January, when QE could be launched.

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In Europe 21st January 2015

Why is Europe worrying about SYRIZA?

PARIS | By Francesco Saraceno via MacroPolis | It is most likely that from the elections of January 25 will emerge a SYRIZA-led government, the main uncertainty being how large a coalition Alexis Tsipras will have to gather to obtain a comfortable parliamentary majority. This is seen with a fair deal of preoccupation in Europe. A preoccupation that does not seem warranted. SYRIZA is no longer the radical party of the beginning, which called for the exit from the euro and for a default on Greek public debt. 

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In Europe 21st January 2015

Draghi’s deal

MADRID | By J.P. Marín Arrese | Mario Draghi has snatched green light for launching his coveted bond-buying scheme. In exchange, he has caved in to German pressure transferring the potential losses to the national banks. The ECB may seem to have lost its independence but striking such a deal was worth the price. 

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In Europe 20th January 2015

If Spain will lead the Eurozone in 2015 and 2016, what happened to the Spailout?

MADRID | The Corner | In spite of, or maybe, thanks to the so-called Spailout (2012), Spain is today one of Europe’s driving forces. The International Monetary Fund’s estimates on global economy point to the country as the outperformer of the Eurozone for the first time in six years. Its GDP would grow by 2% this year and 1.8% in 2016.

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In Europe 20th January 2015

QE and OMT are not the same thing

PARIS | By Francesco Saraceno | I think it is important to clarify once more that QE and the OMT (welcome to the wonderful world of EU acronyms) are not the same thing. If Mario Draghi manages to rally the Governing Council behind him, QE will consist of a vast program of sovereign bond purchases, in order to try to lift the European economy out of deflation. A European version in short, of what was done three years ago by the Fed and other major central banks in the world.

No Picture

In Europe 17th January 2015

Juncker wins fiscal flexibility for his investment plan

BRUSSELS | By Alexandre Mato | Having failed to secure sufficient funding from Member States at the last EU Summit, this could be the first real economic victory in the months since the new Commission was formed. Flexibility is the new buzzword in Brussels, with calls growing for a “smarter application of the Stability and Growth Pact, Commissioner Moscovici announced.