MILAN – The European Central Bank did not lift interest rates, which as mentioned several times by the governor Mario Draghi already stationed at minimum levels available to the institution that decides the Eurozone monetary policy. The ECB, which met in away to Cyprus in one of the two meetings planned outside the new headquarters in Frankfurt during 2015, has improved the estimates on the European economy and announced the start of the Quantitative easing from March 9, from which it expects the rise in inflation and important benefits to the economy ( infographic ).
Dragons. The governor Draghi stated that continue purchases of bonds and securitized loans (Abs) dall’Eurotower already launched in recent months. The Qe has a firepower of 60 billion Euros per month and will be continued until September 2016, but Draghi reiterated that it could go further if inflation does not approaching the target close to + 2%. For its part has arrived yet another invitation to the policy to do its part: “To stimulate investment and job creation must accelerate the entry into force of the reforms.”
The Qe . Dragons anticipated that the ECB will buy securities with a negative return of less than 0.2% set by the Central Bank itself as deposit rates: zero sum operation for the Eurotower. “It was one of the questions most expected by the market,” said Gabriele hot Minotti, coordinator area markets Credem. “It ‘s an aggressive goal, which has undergone generated the reaction of the bond markets, and which gives an indication of the potential appreciation still remained to government bonds.” Beyond this, the technical details do not add much to what is already known and the action approach given the flexibility: the national banks will purchase the titles of their country of reference according to the shares they hold the ECB. In addition to ABS and covered bonds, will buy government bonds on the secondary emissions and agencies (mainly French and German: there are Italian) for 88% of the total program and the remaining 12% of supranational institutions recognized (by Bei EFSF). Deadlines are between 2 and 30 years and securities purchased are those rated ‘investment grade’ (although there is an exception for Greece). There are limits to purchases: 25% of an issue (which may vary for a country like Greece, with an international bailout in progress) and 33% of the total debt of an issuer.
The estimates. The maneuvers of the ECB itself, along with the drop in oil, “are helping the growth,” said Draghi. For this Eurotower economists have revised their estimates significantly better in the GDP of the Eurozone, with a + 1.5% for this year, up 1.9% for the next and + 2.1% for 2017 . In December showed an expansion of 1% in 2015 and 1.5% in 2016. By modifying slightly the ritual formula, the governor warned that “the risks regarding the economic outlook remains bearish, but are decrease “. As for prices, the stability of which is central to the mandate of the ECB, Draghi predicts that “will go up gradually to the end of the year”: expected inflation to zero in 2015 (in December was 0.7%), to + 1.5% in 2016 (in December was 1.3%) and 1.9% in 2017. And ‘this, again for Minotti, the second “important news of the day: the forecasts of the ECB are among the most optimistic of the other institutions 221; . For the expert, if you “come true these conditions countries would breath to fix the public finances: a growth close to 2% next year, with inflation of 1.5% would bring the nominal GDP to grow more 3%, leaving room for a reduction of the public debt. “
rates. It ‘since last September that Frankfurt has fixed 0.05% the cost of refinancing main, that the transactions by which banks fund themselves at the Eurotower, making even fall into negative territory (-0.2%), the rate on deposits: Draghi has introduced a kind of ‘tax’ for institutions who park liquidity Current accounts of the ECB rather than distribute it in the market.
Greece. The ECB could be called “the central bank of Greece” as loans to Athens have doubled to 100 billion euro in a month and a half, reaching 68% of GDP, up eurozone, Draghi said ironically recalling that for the ECB there is a “prohibition of monetary financing”, both direct and indirect, that is, when “banks lead guarantees the ECB to buy government bonds. ” The board has decided to raise the level anyway emergency loans to Greek banks (program Ela ) to deal with any liquidity crisis: it has led to 68.8 billion, 500 million more . The ECB, which has imposed a limit of 15 billion for the emissions of Athens shortly, “is the first to hope to resume financing the Greek economy provided that all the conditions are fulfilled.” State, since the program is under review Athens International, the ECB can not buy Greek bonds. Also because it has already held a share of more than 33% of the tot al, so it will have to wait until the deadline before adding another. But it is “ready to restore the exemption” that allowed her to accept Greek government bonds as collateral despite the rating ‘junk’. Draghi did not fail to send a message to Varoufakis and Tsipras, saying that “some words” spoken by the greek government “have created volatility”.
Markets. Already markets had given the effects of waiting for the official launch of the operation, with the decline of the euro against the dollar: a boost to exporting companies that compete in global markets. The same Draghi spoke of “significant positive effects”, which led to “improved conditions” for credit to households and businesses.
BoE. In the morning, in the meantime, the Bank of England decided to leave key interest rates unchanged at 0.5% in the monthly meeting of the Monetary Policy Committee. This is the confirmation of the record low level of interest rates in Britain, which is resistant to six years (March 2009). The bank led by Canadian Mark Carney has also decided to confirm the amount of the Quantitative easing to 375 billion pounds. The decision was widely expected and has not taken the courses of the pound or government bonds.
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