Yesterday, the ECB announced, as expected, that the most important interest rate in the eurozone would remain at 0.0 percent. The purchase of bonds with a billion dollars is halved from October.
This corresponds to the exit scenario from crisis mode, as ECB president Mario Draghi outlined months ago. The most controversial quantitative easing measures (QE), in which the ECB poured billions into the market by buying up government bonds and corporate bonds, will expire by the end of the year. As a step in this direction, transactions are halved from October to 15 billion euros. The program, which was originally active since 2015, amounted to 60 billion euros, but has already been cut by 30 billion euros per month.
The transition to normality in the interest rate policy should be slower. Higher interest rates are not expected until the end of 2019. The main interest rate has been 0.0 percent since March 2016. And there he remains the sadness of many savers. Debtors, on the other hand, benefit from the lower financing costs.
Criticism of the direction of the ECB's monetary policy came from, among other things, the left. For example, the fiscal spokesman for the left-wing party in the Bundestag, Fabio De Masi, criticized the eurozone as being badly prepared to reduce bond purchases. Wage and pension reductions had castrated monetary policy because credit demand and wage developments were hampered. The Masi: The cheap money from the ECB has landed on the financial markets and has fueled new soap bubbles. At the same time, global disruptions are threatening as a result of current account surpluses in Germany and the euro zone and a reversal of capital flows to emerging markets. "
Without easing monetary policy with public investment, rising wages and pensions, the stability of the euro zone remains vulnerable, the economist noted. Monetary policy needs new instruments to combat financial bubbles in separate markets – "without the rough interest rate policy instrument".
In addition to the monetary policy announcements, the ECB corrected its growth forecasts for the monetary union on Thursday. If the current year predicts a growth of 2.1 percent, the monetary authorities are now more cautious with their prediction at 2.0 percent. Before 2019, the prognosis was also reduced by one percentage point – to 1.8 percent. The ECB, on the other hand, keeps its forecast for inflation stable. For the years up to 2020, an inflation rate of 1.7 percent is expected. This corresponds roughly to the self-imposed goal of inflation of & # 39; something less than two percent & # 39 ;.