Brussels, 23/03/2015 (Agence Europe) - Two weeks after the launch of its 'quantitative easing' ('QE') programme, the European Central Bank had bought back 26.3 billion euros' worth of sovereign debt as of 20 March, according to figures published by the European institution on Monday 23 March (see EUROPE 11268).
Describing QE as a “monetary policy instrument”, the ECB President, Mario Draghi, said on Monday 23 March, at a monetary dialogue with the committee on economic and monetary affairs of the European Parliament, that the impact of the programme for the massive buy-back of sovereign debt would be amplified by the reforms to be continued by the member states. He disagrees with critics who claim that QE will restrict the willingness of the states to reform.
Answering a question from Fulvio Martusciello (EPP, Italy), he identified three levels of structural reforms to be applied: setting in place the single market, creating a positive environment for businesses, particularly in terms of tax pressure, and getting the employment market moving again. There needs to be the right balance between ongoing expenditure and investment and Europe is “the region of the world where taxation is the highest”, Draghi observed, in response to Pervenche Berès (S&D, France), who asked him about possible measures to stimulate demand on top of the structural reforms required. Seeking to reassure Burkhard Balz (EPP, Germany), who expressed concerns about savers' confidence in view of extremely low interest rates, he said that he was confident that acceptance of QE would follow the initial wave of criticism. “The ECB's credibility is also based on respect of its mandate”, in other words keeping average inflation at a level close to but below 2%, he pointed out. The ECB anticipates that inflation will remain low this year, to rise gradually at the end of 2015 (0% in 2015, 1.5% in 2016 and 1.8% in 2017).
EMU reform. Having been congratulated by Sylvie Goulard (ALDE, France) on the ECB's ambitions on reforming the Economic and Monetary Union (EMU), Draghi said that there were “manifest” shortcomings with the governance of the euro, calling for additional long-term measures in order to tighten up economic and budgetary union in the eurozone. (Mathieu Bion)