ECB announces $1.27 trillion stimulus package
European Central Bank to buy $69bn worth of public and private bonds per month until September next year to aid economy.
The European Central Bank (ECB) has announced a programme to buy $69bn of public and private bonds per month until September next year in a bid to kick-start the continent’s faltering economy.
The purchases will begin in March and eventually total $1.27 trillion, said ECB president Mario Draghi on Thursday.
“[The ECB] decided to launch an expanded asset purchase programme encompasing the exisiting purchase programmes,” he said at a news conference.
“Under this expanded programme, the mobnthly purchases of public and private sector securities, will amount to 60bn euros ($69bn).”
Critics had expressed concern that European taxpayers would have to foot the bill of such a programme, known as quantitative easing (QE), if any one country defaulted on its debt, the AFP news agency reported.
But the plan had been designed so that only 20 percent of those risks would be shared, with the other 80 percent to be shouldered by the national central banks of the countries concerned, Draghi said.
QE is regarded as the central bank’s most powerful tool yet to ward off deflation in the single currency area, where consumer prices actually started to fall in December.