ECB second in command on Reuters
- QE is working and effective
- current scheme is small compared to Fed, BOE, BOJ programmes
- stage is set for gradual dismantling of capital controls in Greece
- Eurozone facing a protracted period of low growth
- ECB expects IMF and others' views on Greek debt issue to converge, hopes haircut not necessary
- Europe needs immigrants to change a demographic trend that endangers economic growth
Constancio not ruling out further QE and firing warning shots on the refugee/immigrant crisis but euro not really fazed at the moment although down a few tics
"We said at the last press conference that the size, composition and duration of our present large scale asset purchase programme can be changed. The total amount that we have purchased represents 5.3 percent of the GDP of the euro area, whereas what the Fed has done represents almost 25 percent of the U.S. GDP, what the Bank of Japan has done represents 64 percent of the Japanese GDP and what the U.K. has done 21 percent of the UK's GDP. So we are very far from what the major central banks have done using these instruments. But this is not a benchmark, I mentioned that as an illustration. There is scope, if the necessity is there.
If the price of oil does not continue to go down (it cannot go down indefinitely), we will see a jump in inflation in the last quarter of this year. But we may have before that some months of negative inflation.
Until now we have not seen a reason to doubt that the programme will work. The staff projections are recent, predicated on the completion of the whole programme and foresee inflation at 1.7% by 2017. But we are prepared for any contingency"
Full interview on the ECB website here
