Quantitative Easing

In 2015, the European Central Bank (ECB) launched the "Quantitative Easing" programme to purchase assets worth more than 1 trillion euros. The programme involves the purchase of government bonds by the ECB and national central banks, up to a maximum of 33% of a member state's outstanding national debt. This monetary policy experiment, with no definded end is considered risky.

The ECB justifies the programme by citing the risk of deflation in the Eurozone. Ten key arguments highlight the effects and consequences of the "Quantitative Easing" programme, revealing the potential risks it poses and the misconceptions it may create.

Using background information and extensive industry expertise, the components of the programme and its impact on the economy and politics are analysed.

The programme relieves reform pressure on Eurozone countries, creating false incentives and encouraging significant moral hazzard. Countries that avoid reforms in financial, goods and labor markets benefit, while those undergoing Troika adjustment programms suffer. The purchase of government bonds exposes central banks to unpredicatable risks on thier balance sheets.
No additional money enters the economym as practically no interest is earned on central bank money. The programme contributes to further depreciation of the euro. The ECB's policy can be considered dangerous, as it gives markets and politicians the impressuion that it is the only effective institution in the Eurozone.