Wednesday

28th Feb 2024

ECB slows down eurozone support scheme

  • "We must be patient and persistent," said Mario Draghi (r) (Photo: ECB)

The European Central Bank (ECB) took a first step on Thursday (26 October) towards the end of its emergency bond-buying programme to boost the eurozone economy.

From next January, the ECB will reduce purchases to €30 billion each month, down from €60 billion now.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It did not, however, fix an end date to the programme - which was launched in 2015 - and said it was ready to step it up if the eurozone economy was vulnerable again.

"The recalibration of our asset purchases reflects growing confidence in the gradual convergence of inflation rates towards our inflation aim," ECB President Mario Draghi said at his monthly press conference in Frankfurt.

The ECB's objective is an inflation rate of "below but close to 2 percent".

Draghi insisted that the level of inflation - the ECB's main concern - would be "V-shaped" in the coming month, at 1.5 percent this year, 1.2 percent next year and 1.5 percent in 2019.

He noted that growth in the eurozone was "increasingly robust and broad-based" but that an "ample degree of monetary stimulus remains necessary."

"We stand ready to increase the APP in terms of size and/or duration," he said, referring to the asset purchase programme, the bond-buying scheme also known as quantitative easing (QE).

The ECB chief insisted that the programme was "flexible enough" and could be adjusted to "carry through smoothly."

He said that the improvement of the overall economic situation and labour market was not "self-sustained yet" and still relied "very much on our monetary policy support."

"We must be patient and persistent," he said, adding that the decision to reduce the level of the APP while keeping it "open-ended" reflected that state of mind.

Draghi also stressed that the ECB will reinvest the money from the bond-buying programme in a "flexible and timely manner" where the bond were issued.

The ECB also kept the eurozone interest rates unchanged and said that it expected them to "remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases."

Asked about Catalonia, Draghi said that the ECB was looking at the situation "with great attention".

He said that the importance of the crisis between the Spanish government and the Catalan separatists was "significant" but that it would be "premature" to "conclude now that there would be stability risk" for Spain and the eurozone.

'Be patient,' ECB chief tells Germany

European Central Bank president Mario Draghi keeps interest rates low and answers German criticism by saying they were in everyone's interest.

Investigation

The ECB: EU's 'bad bank' (for its employees)

An internal report finds 'lack of staff' and high 'burnout' levels at the European Central Bank in Frankfurt - the bank trusted with keeping the eurozone stable and secure.

ECB withheld information on 'flawed' bank supervision

The European Central Bank refused to provide important evidence when the Court of Auditors examined its management of the banking crisis. A court report said the system was substantial but had "flaws".

Angry farmers block Brussels again, urge fix to 'unfair' prices

Following weeks of demonstrations across Europe, farmers returned to Brussels to protest over unfair competition in prices, as EU agriculture ministers met just a few metres away to discuss a response. The police used water cannon and tear gas.

Latest News

  1. Macron on Western boots in Ukraine: What he really meant
  2. Amazon lobbyists banned from EU Parliament
  3. MEPs slap three-month ban on foreign ads ahead of EU polls
  4. EU nature restoration law approved after massive backlash
  5. Memo from Munich — EU needs to reinvent democracy support
  6. For Ukraine's sake, pass the EU due diligence directive
  7. All of Orbán's MPs back Sweden's Nato entry
  8. India makes first objection to EU carbon levy at WTO summit

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us