After years of German opposition and legal wrangling, the ECB will finally get to pursue its own quantitative easing policy.
Bloomberg’s Jeff Black and Simon Kennedy write:
Mario Draghi led the European Central Bank into a new era with an historic pledge to buy government bonds as part of an asset-purchase program worth about 1.1 trillion euros ($1.3 trillion).
The ECB president side-stepped German-led opposition to quantitative easing in a once-and-for-all push to revive inflation and the euro-area economy. The central bank will buy 60 billion euros per month of securities until September 2016. The ECB also reduced the cost of its long-term loans to banks.
A near-stagnant economy and the risk of deflation forced Draghi’s hand six years after the Federal Reserve took a similar step to inject cash into the U.S. The 67-year-old Italian’s gamble is that the benefits of quantitative easing outweigh the threat of a backlash in Germany.
