Beware of false hopes Quantitative Easing can offer Europe

The European Central Bank's QE programme is intended to stimulate the eurozone’s economy (photo: dpa)
The European Central Bank's QE programme is intended to stimulate the eurozone’s economy (photo: dpa)

The European Central Bank will make monthly purchases of mostly sovereign bonds worth 60 billion euros from March 2015 onwards until at least September 2016 - a total of more than one trillion euros. This was expected and is welcomed by financial markets and many politicians. But will it help boost Europe’s economy and encourage structural reform in the EU, and who benefits most?

<i>The ECB’s programme of Quantitative Easing cannot deliver the same positive effects on the eurozone’s real economy as QE had in the US or the UK. Euro-interest rates have already been pushed down and liquidity injected massively - without much effect on the real economy. Most of the extra one trilli...

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