, pub-6663105814926378, DIRECT, f08c47fec0942fa0 Can easy money save the eurozone? 4289

Can easy money save the eurozone?

Europe’s central bankers are taking a page out of the Federal Reserve’s playbook, said Matt O’Brien in The European Central Bank announced last week that it will launch a $1.3 trillion asset-purchasing program to “reverse the continent’s long, slow slide into economic stagnation.” The strategy, known as quantitative easing, involves snapping up $69 billion in government and private bonds each month, mirroring the Fed’s recently ended, six-year QE program, which some analysts have credited with helping keep the U.S. economy in a sustained recovery mode.

But Europe might be a different story, said John Cassidy in In theory, QE “causes the price of bonds to rise, which translates to a fall in interest rates.” That triggers an increase in borrowing, and, eventually, more “spending by businesses and households,” which helps pull the economy out of its slump. But the ECB’s biggest challenge will be psychological. The eurozone has been “trapped in a malaise” for several years, and as a result, “businesses have been reluctant to make capital investments, consumers have been reluctant to spend, and banks have been reluctant to lend.”

Good luck turning that around, said Paul Wallace in Under its version of QE, the eurozone’s 19 member nations will buy their own governments’ bonds “and bear any risk of losses.” That and other measures are designed to protect ECB shareholders in case of a sovereign default—like what will happen if Greece goes ahead with its plans to abandon the euro. The ECB has hedged against that by announcing that Greek bond purchases will be off the table when the QE program starts in March. In exchange, the central bank’s purchasing program is more aggressive than expected. But the trade-off “is an important breach in the ECB’s usual risk-sharing arrangements,” which could lead to the kind of fragmentation it has long sought to avoid.

It’s “still a worthwhile effort,” said Jordan Weissmann in With unemployment at more than 11 percent, anemic growth, and the specter of a deflation crisis, the ECB “needs to do something to revive the eurozone, and quantitative easing is the biggest untried tool in its arsenal.” But it’s no panacea. Until Europe can shift its focus away from reducing debt and toward “fiscal stimulus and reforms that would fix its calcified, uncompetitive labor market in the most troubled countries,” the ECB will face an uphill climb.

This all goes to show there is such a thing as being “too responsible,” said Paul Krugman in The New York Times. By ignoring “the evidence in favor of a narrative that placed all the  blame on budget deficits,” Europe embraced a policy of austerity and an inflation phobia that doomed its economy from the start. “True, there have been times when being tough meant reducing deficits and resisting the temptation to print money. In a depressed economy, however, a balanced-budget fetish and a hard-money obsession are”—and were—“deeply irresponsible.”

homeowners insurance home insurance state farm car insurance
comprehensive insurance commercial insurance cheap auto insurance
cheap health insurance indemnity car insurance companies
progressive quote usaa car insurance insurance near me
term life insurance auto insurance near me state farm car insurance
comprehensive insurance progressive home insurance house insurance
progressive renters insurance state farm insurance quote metlife auto insurance
best insurance companies progressive auto insurance quote cheap car insurance quotes
allstate car insurance rental car insurance car insurance online
liberty mutual car insurance cheap car insurance near me best auto insurance
home insurance companies usaa home insurance list of car insurance companies
full coverage insurance allstate insurance near me cheap insurance quotes
national insurance progressive home insurance house insurance
health insurance quotes ameritas dental state farm renters insurance
medicare supplement plans progressive renters insurance aetna providers
title insurance sr22 insurance medicare advantage plans
aetna health insurance ambetter insurance umr insurance
massmutual 401k private health insurance assurant renters insurance
assurant insurance dental insurance plans state farm insurance quote
health insurance plans workers compensation insurance geha dental
metlife auto insurance boat insurance aarp insurance
costco insurance flood insurance best insurance companies
cheap car insurance quotes best travel insurance insurance agents near me
car insurance car insurance quotes auto insurance
auto insurance quotes long term care insurance auto insurance companies
home insurance quotes cheap car insurance quotes affordable car insurance
professional liability insurance cheap car insurance near me small business insurance
vehicle insurance best auto insurance full coverage insurance
motorcycle insurance quote homeowners insurance quote errors and omissions insurance
general liability insurance best renters insurance cheap home insurance
cheap insurance near me cheap full coverage insurance cheap life insurance
structured settlement annuity companies structured settlements annuities structured settlement buyer
small business administration sba structured settlement purchasers houston tx auto insurance
selling my structured settlement selling annuity structered settlement
caraccidentlawyer auto accident attorney Torrance accident attorney orange county
accident attorneys orange county personal injury accident lawyer car accident lawyers los angeles
auto accident lawyer san francisco los angeles motorcycle accident lawyer state of california car insurance
selling a structured settlement hughes net business structured settlement need cash now
fast cash for house maritime lawyer houston personal injury attorney ocala fl
home equity loan reverse mortgage us bank home mortgage
personal loans for bad credit peer to peer lending home equity loan rates
refinance mortgage personal loan rates first time home buyer programs
cash out refinance home mortgage rates mortgage lenders

No comments:

Post a Comment

Popular Posts