ZEW President Fuest on ECB Decision

The European Central Bank (ECB) has decided on the volume of its bond-buying programme: The ECB will buy eurozone government bonds and other assets worth EUR 60 billion per month until September 2016. The President of the Centre for European Economic Research (ZEW), Professor Clemens Fuest, comments:

"I consider the ECB’s decision to be an acceptable compromise that is consistent with the ECB's mandate.

Against the backdrop of the persistently low inflation rate in the eurozone, today's decision is indeed justifiable. Since the programme is limited to investment grade bonds, the ECB will not buy, for instance, Greek government bonds. Furthermore, the national central banks will assume liability for 80 per cent of possible losses. This restriction addresses concerns about an undesired mutualisation of government debt. It reduces the risk of ECB losses in case of a debt restructuring, which would have to be shouldered by all member states. The bond-buying programme is a relief for the crisis-stricken countries. However, economic policy reforms in Europe must continue."

For more information please contact

Prof. Clemens Fuest, Phone +49(0)621/1235-100, E-mail fuest@zew.de