Mario
Draghi threw one trillion euros at Europe's faltering economy Thursday and told
people to stop blaming the central bank for the hardship they feel.
Loans and mortgages worth as much as one
trillion euros ($1.3 trillion) -- including some junk-rated assets from Greece
and Cyprus -- qualify as assets that will be purchased by the ECB over two
years. There are conditions attached and no guarantee that the central bank
will buy them all.
The stimulus measures were announced in early
September, alongside the bank's second interest rate cut this year. The ECB
will start buying some of the assets later this month.
The ECB has taken a series of bold policy
steps into uncharted territory this year, driven by concern that current very low
inflation may turn into a vicious circle of falling prices and economic
stagnation similar to the fate Japan suffered in the 1990s.
But the outlook has worsened still further
in recent weeks, with inflation across the eurozone falling to just 0.3% in
September.
Unemployment has been stuck at 11.5% for the
past three months, and survey data suggests Germany, Europe's biggest economy,
may slip into a third recession since the financial crisis. Italy's economy is
shrinking again, and France has managed just three quarters of growth in the
last nine.
That has prompted more calls for the ECB to
go all in with a U.S. Federal Reserve-style program to buy government bonds, or
full-blown quantitative easing (QE). Thousands of people protested against
austerity outside the ECB meeting, held Thursday in the Italian city of Naples.
Draghi said he understood why people were
angry, given years of recession and high unemployment. But he said their
criticism of the ECB was misdirected. "I find the description of the ECB
as the guilty actor here needs to be corrected," Draghi told reporters, listing
the "unprecedented" measures the bank has taken.
He repeated a pledge that the bank would use
further "unconventional instruments" if necessary -- seen as code for
QE -- to get the economy moving again. He also took a thinly veiled swipe at
some European governments for failing to step up. He said monetary policy
needed to be accompanied by greater commitment to reform their economies, a
remark analysts said was aimed particularly at Italy and France.
"We know that our measures are going to
be more effective, or may be effective only if other policies are in
place," Draghi said. "Each actor has its role to perform."
(Πηγή: money.cnn.com)
