ECB sees no need to start tapering QE just yet, minutes show

21st May 2015, Comments 0 comments

The European Central Bank revealed Thursday that its governing council believes its contested bond purchase programme is working and there is no talk of scaling it back just yet.

"Members generally agreed that a steady hand and the firm implementation of the measures decided in January 2015 would best serve to support the economic recovery and a return of inflation towards 2.0 percent," according to the minutes of the governing council's meeting on April 14 and 15 released on Thursday.

"There was hence no need to consider any change in the monetary policy stance at present" or to reconsider any of the parameters of the purchase programme, the minutes stated.

The ECB announced in January that it would embark on a programme of so-called quantitative easing or QE, a massive 1.14-trillion-euro ($1.3-trillion) sovereign bond purchase scheme aimed at bringing area-wide inflation back up to levels consistent with healthy economic growth.

Under the programme, the ECB aims to buy 60 billion euros of bonds per month until September 2016.

The ECB actually launched the programme in March and its top officials are convinced that the purchases are having the desired effect and inflation rates in countries such as Germany and France area gradually moving upwards.

Nevertheless, the scheme has its critics, not least the head of the German central bank or Bundesbank, Jens Weidmann, who fear it will lessen pressure on governments to get their economies and finances in order.

And given its early success, there is some speculation that the programme's opponents on the ECB governing council could argue for an early roll-back as the eurozone recovery picks up speed.

But according to the minutes of the April 14-15 meeting, this is not the case.

"While there was a case for guarded optimism on the short to medium-term outlook for the euro area economy, taking into account initial evidence that the monetary policy measures were proving effective, it was important to remain cautious," the minutes said.


© 2015 AFP

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