Draghi leaves Athens without cheap money
The ECB will launch its large-scale bond-buying progrramme on Monday. ECB chief Mario Draghi confirmed on Thursday that Greek bonds wouldn't be included for the time being. The bank is smothering the Greek economy with this policy, some commentators criticise. Others argue that the ECB should never buy the bonds of a bankrupt state.
State financing by central bank absurd
The example of Greece shows just how dangerous and absurd the ECB's strategy is, the conservative daily Frankfurter Allgemeine Zeitung warns: "The ECB won't buy any more government bonds from Greece - but only for the time being. It shouldn't buy any bonds from a country whose own finance minister Giannis Varoufakis says is a 'bankrupt state'. The next major hurdle comes in July when Varoufakis has to repay loans with a nominal value of over four billion euros held by the ECB. Only once these loans have been repaid will the ECB's percentage sink below the 33 percent limit fixed by the central bank. But then the bank is free to start buying bonds again according to its own decision. It's absurd: Varoufakis has to come up with billions of euros to pay the ECB so it can start buying bonds again. But no, the ECB is not financing a state."
ECB choking Greek economy
Greece will not take part in the ECB's bond-buying programme because it does not yet fulfil the requirements for ECB loans, ECB President Mario Draghi said on Thursday. The liberal online daily To Vima criticises this decision: "Once again Athens is receiving funding only drop by drop. ... Clearly this will help neither Greece nor Europe, and can only have dramatic repercussions. It's absurd that our European partners are demanding immediate changes and reforms on the one hand while at the same time allowing our economy to asphyxiate by forcing us to fulfil our obligations to them. The Greek government has committed itself to presenting the Euro Group with a first package of concrete reforms and cost data this coming Monday. ... Neither our public finances, nor our real economy, nor society as a whole can live in a state of permanent uncertainty in the months to come."
Bond-buying programme comes too late
The multi-billion bond-buying scheme won't help revive the European economy, the left-liberal daily Der Standard comments: "Interest rates are already at a record low, and the Eurozone is already over the worst phase according to the ECB economists. ECB President Mario Draghi points to the danger of inflation - he doesn't expect prices to rise any further this year. But the low price of oil, which is also crucial in pushing growth, is to blame for this trend. And according to the central bank's rules the lion's share of the fresh money will flow into Germany, which already has negative interest on its government bonds. This cash injection won't be of much help to the Italian or Spanish companies, whom banks refuse to lend to. Two years ago such a programme would have been appropriate. But the politicians weren't ready for it back then. Dr. Draghi's miraculous cure comes too late to help the euro patient. Even if it doesn't do any harm, it's certainly not coherent monetary policy."
Draghi securing recovery in Europe
The large-scale bond-buying programme will help put the recovery in the Eurozone on a stable footing, the liberal business daily Financial Times comments approvingly: "Though it has moved too slowly in response to weak growth and low inflation, the ECB is now correctly taking steps to turn a nascent upturn into a sustained recovery. ... With its QE programme, the ECB has - somewhat belatedly - taken the right approach. Mr Draghi has successfully faced down wrong-headed opposition within the bank to extraordinary measures to loosen monetary policy. It should continue with the programme until the trickle of good news has become a sustained and steady flow."