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  ECB monetary policy

  32 Debates

The European Central Bank (ECB) has cut its interest rate for the first time since 2019. The 0.25 percentage point reduction from 4.5 to 4.25 percent makes borrowing cheaper while savers will generally receive less interest on their deposits. The ECB had raised its key interest rate ten times since 2022. The bank justified the cut pointing to easing inflation and a drop in price pressure. Commentators are divided over the wisdom of the move.

The ECB has raised interest rates for the seventh time in a row in its bid to further curb inflation in the Eurozone. Inflation rates rose slightly again last month, from 6.9 to 7 percent. The ECB's decision mirrors the latest move of the US Federal Reserve, which also raised rates by 0.25 percent. Not all commentators are happy with this "mini-hike".

Despite the turbulence on the financial markets, the European Central Bank raised the key interest rate by half a percentage point to 3.5 percent yesterday. The monetary watchdog is aiming to curb inflation, which remains high. Commentators discuss whether the move will have a calming effect as an expression of confidence in the resilience of the banking sector or is too risky right now.

The ECB has followed the lead of the US Federal Reserve and the Bank of England and raised its key interest rate by another 0.5 percentage points in a bid to curb inflation. The hike was lower than the previous one but ECB chief Christine Lagarde announced further increases for next year. The inflation rate in the Eurozone dropped slightly in November from 10.6 to 10 percent.

In its biggest interest rate move since the introduction of the euro, the European Central Bank has raised its key interest rates by 0.75 percentage points to 1.25 percent. The bank's Governing Council already announced in the summer that it was abandoning its years-long zero interest rate policy. The move aims to counteract the rampant inflation in the Eurozone, currently at 9.1 percent. The monetary watchdogs have acted too late, commentators complain.

After a long delay, the European Central Bank has announced it is raising interest rates by 0.5 percent. It has also unveiled a new crisis instrument, the TPI, designed to help heavily indebted countries through bond purchases. Commentators question whether this will staunch the double crisis of inflation and a looming recession.

The ECB's Governing Council has held an emergency meeting just one week after announcing an interest rate hike. The monetary watchdog is concerned about the rise in yields on government bonds which followed the announcement and which poses a problem for highly indebted countries like Italy. Among other measures, the ECB plans to help these countries by reinvesting redemptions from maturing bonds.

After the US Federal Reserve and the Bank of England, the European Central Bank is also hiking interest rates. It announced a raise of 0.25 percentage points in the key interest rate from July - the first increase in more than ten years. In view of record inflation levels, which are currently around eight percent across the Eurozone, the move was expected and even welcomed. For Europe's commentators, however, many questions remain unanswered.

ECB chief Christine Lagarde has admitted that the central bank underestimated inflation in the Eurozone. She said, however, that the ECB expects inflation rates to drop in the current year, meaning that it will have to wait for March forecasts on inflation and the economy before deciding on any changes to its monetary policy. Commentators are for the most part sceptical.

In contrast to the US Federal Reserve, which is raising interest rates, the ECB is sticking to its zero interest policy for the time being. ECB chief Christine Lagarde reiterated on Thursday that the current high inflation levels were a temporary phenomenon. Instead, the ECB's Governing Council announced that it will discontinue its Pandemic Emergency Purchase Programme (PEPP) at the end of March. Many commentators take a sceptical view of the decisions.

The inflation rate in the Eurozone climbed to 4.1 percent in October. Critics accuse the ECB of fueling this trend with its loose monetary policy, which involves pumping billions into money markets through bond purchases. ECB chief Christine Lagarde has now responded by calling for patience, saying that inflation will decline without intervention by the central bank.

Despite rising inflation, the European Central Bank is leaving the key interest rate at zero percent. ECB chief Lagarde is convinced that the current inflation trend is temporary and driven by high energy prices, among other things. The ECB will also decide in December whether to stop its multi-billion bond-buying programme. How long can it maintain its accomodative monetary policy?

Jens Weidmann, head of Germany's central bank the Bundesbank for more than a decade, is retiring at the end of the year for personal reasons. In Europe he was best known as a critic of the European Central Bank's loose monetary policy, especially under Mario Draghi. Commentators discuss what his departure will mean.

EU Commission President Ursula von der Leyen is considering launching infringement proceedings against Germany. On May 5 the country's Federal Constitutional Court ruled that the ECB's bond-buying programme partially contravened German law because it did not respect the principle of proportionality. Von der Leyen argues that the EU, rather than national authorities, is responsible for monetary policy. Is a lawsuit a good idea?

After eight years in office Mario Draghi stepped down as ECB president on Thursday. His successor is Christine Lagarde. Draghi's presidency was defined by the zero-interest policy which aimed to stabilise the euro and boost economic growth. Commentators take different views of how successful this policy was.

The EU Parliament's Economics and Monetary Affairs Committee has recommended Christine Lagarde for the post of ECB president. Commentators criticise the fact that Lagarde, currently IMF chief, has defended current ECB head Mario Draghi's low-interest policy. Others see her embarking on a tricky balancing act.

In view of the bleak economic outlook and weak inflation, the ECB has decided to maintain the benchmark interest rate at the record low of zero percent at least until mid-2020. It also said it would consider buying bonds again if the inflation prospects worsen. Is this the right monetary policy for the times?

The nomination of IMF boss Christine Lagarde as ECB chief propelled stocks upward on Europe's markets. It is expected that the former French finance minister will continue the cheap money policy of her predecessor Mario Draghi. Not all observers are thrilled.

In view of a gloomy economic outlook and weak inflation European Central Bank chief Mario Draghi is considering adopting a more relaxed monetary policy with further interest rate cuts and bond buying. Draghi's statements at the ECB Forum in Sintra, Portugal, triggered turbulence on the financial markets and drew harsh criticism from US President Donald Trump.

The European Central Bank plans to cut its bond purchasing by half as of January. But at least until September 2018 it will continue to buy a maximum of 30 billion euros worth of bonds each month. The base interest rate has not been touched. Some commentators praise ECB chief Draghi for his cautious change of direction in monetary policy. For others it doesn't go far enough.

Emergency appeals against the purchase of government bonds have been rejected by Germany's Federal Constitutional Court. The plaintiffs wanted the court to stop Germany's central bank, the Bundesbank, from participating in the ECB's bond-buying programme. Some commentators criticise the court as cowardly. Others name reasons why using legal means to stop quantitative easing would be wrong.

The ECB will stick to its loose monetary policy for the time being, maintaining the benchmark interest rate at its record low of zero percent and leaving open the possibility of extending the bond-buying programme. ECB head Draghi justified the decision pointing to the euro's fluctuating exchange rate. Has the time for higher interest rates come?

Leading central bankers and economists from around the world are convening this week at their AGM at Jackson Hole in the US. Many of them are unsure whether to stick to the path of low interest rates and multi-billion programmes to buy up government bonds. Commentators have their own demands to make to the monetary policy makers.

ECB chief Mario Draghi has made it clear that the ECB has no intention of lowering interest rates even further after years of an expansive monetary policy. The benchmark interest rate will, however, be left at its current level of zero percent for the time being. Some commentators criticise the central bank's lack of resolve. Others say its cautious approach makes sense.

Inflation in the Eurozone rose considerably in December. The EU's statistical office Eurostat announced on Wednesday that consumer prices were 1.7 percent higher than a year ago. This is the highest rate of inflation since September 2013, prompting some journalists to call for an end to the ECB's expansive monetary policy. Others say such a move would have disastrous consequences.

ECB chief Mario Draghi announced on Thursday that the bond buying programme will be continued until at least the end of 2017. From April, however, it will be scaled down to 60 instead of 80 billion euros per month. Draghi is gradually turning off the cheap money supply and Italy in particular needs to take action, commentators warn. Others say the bond buying programme won't end any time soon because Europe's stability is at stake.

Mario Draghi has countered criticism of his zero interest rate policy from Germany saying he must preserve price stability for the whole of the Eurozone and not only for Germany. At the same time he announced that the benchmark interest rate would be left at its current historic low. Are Berlin's complaints justified or is it overstepping the mark?

Criticism of the ECB's zero interest rate policy is growing louder. Finance Minister Wolfgang Schäuble said on the weekend that the loose monetary policy was contributing to the growing popularity of the national-conservative AfD party in Germany. The press discusses the accusation and the effectiveness of the relaxed monetary policy.

The ECB's Governing Council is widely expected to unveil a large-scale plan for the purchase of government bonds at its meeting today, Thursday. The decision could further divide the Eurozone if the crisis states abandon austerity and prompt rich countries to end their solidarity, some commentators fear. Others see the plan as an important step towards pulling debt-ridden countries out of their financial misery.

Share prices soared on Thursday in reaction to the ECB's announcement that it will launch a multi-billion euro bond-buying programme. Meanwhile the euro dropped below 1.14 against the dollar. This trend will help the export trade, some commentators write jubilantly. Others see the Eurozone on its last legs now that the ECB has been forced to resort to the only instrument left at its disposal.

The ECB announced on Thursday that it would prolong its controversial bond-buying programme until March 2017. Because investors had expected an increase in the volume of monthly purchases, stock markets around the world slumped on Thursday. But the investors' disappointment is unjustified, commentators write, and doubt that Europe's economy can be saved with additional money.