ECB ending glut of money?

The European Central Bank has announced that it won't put any more money into its bond-buying programme starting January. While some commentators believe the decision is dangerous in view of the current economic situation, others criticise the bank for not stepping harder on the monetary brake.

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La Vanguardia (ES) /

Safety net is gone

La Vanguardia frowns at the ECB's decision:

“The withdrawal of the monetary incentives comes at a bad time, with risks like Brexit, France and Italy's public deficit difficulties, the trade war, the crisis in the emerging economies and the volatile financial markets. ... We'll have to wait and see how all these factors respond now that this important monetary safety net is gone. First of all the governments will have to be far more rigorous in their economic and fiscal policies to maintain the investors' confidence in the respective public debts and avoid penalties on their interest rates [the interest they pay on bond markets] - something which the ECB had protected them against up to now.”

Frankfurter Allgemeine Zeitung (DE) /

Draghi continues to pull out all the stops

Those who say the ECB is stepping on the brakes in monetary policy are being taken in by Mario Draghi, the Frankfurter Allgemeine Zeitung warns:

“Because in reality the central bank still has its foot on the gas pedal. Only net purchases of government bonds are to be stopped starting next year. With the money from maturing bonds, new securities will continue to be purchased. So there can be no talk of a stop to the bond buying. ... But since the ECB is using all the monetary instruments at its disposal, continuing to pursue as expansive a monetary policy as possible despite the economic recovery, the question is what it will do in the event of a downturn, which will come as sure as Amen in the church. Will it start buying stocks as well, or all the government bonds it can get hold of?”

Der Standard (AT) /

ECB has stabilised the euro

Der Standard heaps praise on the ECB's monetary policy:

“The ECB's bond-buying programme which is now coming to an end in December has helped to stabilise the euro. The costs for loans in southern Europe have been drastically reduced and with this the ECB has generated an important economic stimulus. Inflation is not out of control, in the Eurozone it's right on target at two percent. And guaranteeing interest rates for savers is not and never was the task of the central bank. Many critics of Draghi still haven't understood this today.”

Le Temps (CH) /

Creative solutions to save the global economy

Le Temps examines whether the ECB has overstepped its mandate of guaranteeing price stability with its expansive monetary policy:

“The answer is no. Because by reviving consumption you prevent deflation. ... In a globalised production chain the prices of many products and services continually decrease. In addition the increases in productivity brought about by the new information technologies decelerate inflation. Meaning that the fight against inflation is passé. The central banks have understood this, and have been able to find creative solutions to save the global economy.”