Monatelang seemed to be of the Council of the European Central Bank (ECB) are largely in agreement about the course of monetary policy in the Euro area: the ultra-loose it should be, rich in bond of all kind of purchases in order to bring the lofty goal, Inflation and growth in the single currency area finally back in the swing. A gradual phase-had not been discussed, fought off the ECB President, Mario Draghi, even at the recent press conference for any Enquiries, feel free to: the and in view of the weak Outlook for Inflation continues to be a non-issue.
But since this week, the Consensus seems to be there. Several high-ranking Central bankers reported in terms of phase-to-word – with quite conflicting estimates. Until the next monetary policy decision in early March, a few weeks back it is still. The tone of voice in the Council, should continue to increase, is expected to be the upcoming debate for Draghi, however, are significantly more uncomfortable than the last.
Deflation far away
The beginning of the ECB Director Sabine made a loud racket. “I’m optimistic that we can devote ourselves soon, the question of the exit,” said the former Federal banker and referred to the recent increase in inflation data. Bundesbank President Jens Weidmann agreed with her on Thursday evening: “If this price development is sustainable, creates the prerequisite for the exit from the loose monetary policy,” he said in a speech at the financial market closed meeting of the CDU economic Council.
The recent jump in the rate of inflation in the Euro area and especially in Germany is mainly due to the rise in energy prices. “Of Deflation, which some summoned in the past and as a justification for the government bond purchases were used, we are thus far. And also I used to kept the risk of such a development is rather low," said Weidmann.
France is in favour of Draghi’s line
In the camp of the supporters of the ultra-loose rate, it is likely to interpret these words as a kind of side-swipe. Especially since Weidmann is not division in his speech with criticism of the potential consequences of ultra-loose policy. So would hold at the state house through the very low interest charges a “load carrying capacity illusion” is created, which will disappear with the rising level of interest rates. It is in revenge, that the EU Commission will interpret the rules of the stability and growth Pact is extremely flexible.
the French Central Bank chief, Francois Villeroy de Galhau, However, saw no need to worry about an exit from ultra-loose monetary policy to debate. Neither is purchases a melting of the bonds, nor any Exit strategy been spoken of, said the ECB’s governing Council member. It was clear: “The bond purchases will not last forever.”
However, what time frame could include, but is not revealed to de Galhau. Most recently, the ECB had decided in December to extend its securities purchases to nine months to the end of this year. Thus, Germany’s controversial purchase of swells programme to around of 2.28 trillion euros. With your purchases of government bonds, the ECB has become the largest creditor of the member States.