Wednesday, 25 Nov 2020

Named the moment of truth for the European economy

The European Central Bank (ECB) called September the moment of truth for the European economy, writes Bloomberg. It is in the first month of autumn, according to the regulator, that the approximate prospects and necessary measures to support businesses and residents of the European Union will become clear.

The ECB management believes that at the moment there is not enough data to objectively assess the state of the economy and make further plans. One of the key issues concerns the quantitative easing (QE) program, in which the regulator buys up corporate and government bonds of Euro zone countries.

Its total volume should be 1.3 trillion euros, but some economists and members of the ECB’s Board of Directors consider this figure “a ceiling, not a goal”, pointing out that it is not necessary to comply with it if the economy recovers at a faster pace than planned.

The debate revolved around how to interpret data on the growth of the economy: whether to consider them premature or rely on them for further policy-making. In recent weeks, data on a small increase is regularly replaced by data on a fall.

Meanwhile, outside experts believe that we should not expect significant steps from the ECB, including new stimulus measures, until December.