Marcel Fratzscher head of the German institute for economic research (DIW) says the ECB should pull out the big guns and start blasting QE to the tune of €60bn PER MONTH.
“It is high time for the ECB to act. Otherwise Europe risks falling into a dangerous downward spiral of sliding prices and declining demand. The ECB must counter the deflation threat quickly and decisively, and launch a broad-based programme of bond purchase along the lines of the Federal Reserve,”, he wrote in Die Welt.
The DIW is one of the main institutes who officially advise the German government on economic affairs and Mr Fratzscher seems to be rather worried about the real prospect of deflation;
“The outcome could be a vicious circle that is ever harder for the ECB to stop. Japan’s experience over the last twenty years shows how painful such a scenario can be.”
AEP in the Telegraph brings us the news (h/t Birendra)
At today’s money €60bn is around $83bn which would basically match the Fed at the height of QE.
There’s more chance in my league football team (West Ham) winning the national World Cup than there is in seeing €60bn in QE each month from the ECB. Mind you, we did it once back in 1966
