Currency and Financial Markets ECB Europe Monetary Policy

Statement on Today’s Decisions of ECB’s Governing Council 07/16/2015

The ECB has sent a strong signal of trust in the implementation of a third program by increasing its ELA support to Greek banks. The ECB underlines that it considers Greek banks fundamentally solvent. Mr. Draghi is optimistic that a bridge financing will be in place to cover Greek repayments to the ECB on 20 July.… [continue reading]

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Currency and Financial Markets Europe Monetary Policy

An Overwhelming Success for the European Central Bank

The decision by the European Court of Justice (ECJ) is an overwhelming success for the European Central Bank (ECB). The OMT program has been ruled to be fully consistent with European law. The ruling means that the ECB has an additional, important monetary policy instrument to fight the European crisis. It implies that the OMT program has not become superfluous with the start of the current QE program of the ECB. On the contrary, a Grexit and renewed intensification of … [continue reading]

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Currency and Financial Markets Europe Macroeconomics Monetary Policy

Giving Greece a Chance

Opinion piece by members of the Eiffel Group and the Glienicke Group, 20 May 2015

The Greek tragedy must not go on. Europe’s growing frustration with the new Greek government has triggered calls for stopping negotiations and even accepting “Grexit”, Greece’s exit from the euro. We believe that this would be a mistake. Grexit would be a collective political failure. Above all, it would cause a social and economic catastrophe for Greek citizens.

However, keeping Greece in the euro … [continue reading]

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Economic Policy Monetary Policy

ECB Projections for Growth and Inflation Very Optimistic – Downside Risks to the Euro Area Still Significant

Comment on the ECB Monetary Policy Decisions (5 March 2015):

The new ECB projections for growth and the return to price stability are very optimistic. The ECB projections are based on probably too optimistic expectations about the effectiveness of its QE programme. The weak euro and the decline in government bond yields over the past few months are largely the result of the high expectations about the QE programme. It is unlikely that the QE programme will continue to exert … [continue reading]

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Currency and Financial Markets Economic Policy Monetary Policy

Decision of ECB sends a strong and convincing argument

The decision of the ECB sends a strong and convincing argument that it is determined to pursue its mandate of price stability. The programme constitutes a necessary step to help end the European crisis. We don’t have to like the programme, but we should support it to give Europe a perspective for the future.

The size of the purchase programme sends a credible signal to financial markets, also as it exceeds expectations. The ECB rightly underlines the urgent responsibility of … [continue reading]

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Currency and Financial Markets Europe Monetary Policy

The ECB’s dilemma

by Marcel Fratzscher, Michael Hüther and Guntram B. Wolff.
This text was also published on
BerlinOeconomicus (German), in Le Monde  and in El País.

As the ECB is likely to announce a government bond purchase programme on January 22, the opposition in Germany is growing. The potential election of a government in Greece with its intention to restructure debt towards its official creditors puts the upcoming ECB’s decision under even greater scrutiny. The fact that the ECB has … [continue reading]

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