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29 Dec 2014
No need for ECB to buy sovereign bonds now – German economic advisor
FXStreet (Mumbai) - The head of the panel of economic experts that advises the German government said on Sunday there was no reason for the European Central Bank (ECB) to start sovereign QE now to bolster euro zone growth.
"The Central Bank has already introduced various measures to help growth ... we see no reason to buy up state bonds now," Christoph Schmidt, head of the so-called economic "wisemen" told the Welt am Sonntag weekly. He further added, "But the question is whether the ECB has to preventively fight a fall in prices that has not yet been forecast. We see no reason for this. The ECB could quickly react to deflation by buying sovereign bonds if it really had to.”
"The more active the central bank is ... the bigger the risk that France and Italy throw the necessary reforms into the long grass," said Schmidt. On Saturday, German Finance Minister Wolfgang Schaeuble expressed his reservations against any ECB bond buying stimulus program.
"The Central Bank has already introduced various measures to help growth ... we see no reason to buy up state bonds now," Christoph Schmidt, head of the so-called economic "wisemen" told the Welt am Sonntag weekly. He further added, "But the question is whether the ECB has to preventively fight a fall in prices that has not yet been forecast. We see no reason for this. The ECB could quickly react to deflation by buying sovereign bonds if it really had to.”
"The more active the central bank is ... the bigger the risk that France and Italy throw the necessary reforms into the long grass," said Schmidt. On Saturday, German Finance Minister Wolfgang Schaeuble expressed his reservations against any ECB bond buying stimulus program.