Analyze IMF

Topics: Monetary policy, European Union, Central bank Pages: 1 (349 words) Published: October 11, 2014
Nikolaos Styponias
Weekly News Article Summary: ECB's Draghi Keeps Door Open to Quantitative Easing
Eurozone is in the middle of a big economic crisis, which affects not only the members of the union but the whole world. However economic performance varies from country to country, Eurozone countries follow fiscal policies in order to generate profits, specifically from the countries that deficit is equal or grater to 3%. Eurozone as a whole has a debt percentage exciding 60%. Last month, Mario Draghi European Central Bank President seeks to protect Eurozone’s fragile economy by keeping doors open to Quantitative easing. The target of that measure is to lower the interest rates and increase the money supply within the European Union. It’s the first time that ECB’s loans governments came with ultralow financing rates of 0.15%. Defining his measure Quantitative Easing means, to increase the money supply by lending money to financial institutions thus promoting lending to investors and increasing liquidity. However as it is mentioned in the aricle ECB’s measures will fall flat if Governments fail to make the necessary reforms to create more flexible economies. Quoting his thoughts “Courageous structural reforms and improvements in the competitiveness of the corporate sector are key to improving (the) business environment, No monetary—and also no fiscal—stimulus can ever have a meaningful effect without such structural reforms " Mr. Draghi said.

In my opinion these reforms will definitely help to stabilize and promote the Eurozone’s Economy. England which followed these measures announced inflation equal to 2% something that is far more optimistic than other countries which have 0,2%. Also from my point of view these measures seek to weaken the Eurozone’s currency, which will have, the effect of increasing exports therefore boosting inflation. Draghi seeks to equate the Euro-Dollar currency by 2016. Last but not least, increasing the inflation something that...
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