Brian Hayes MEP and ECON Committee Member said today (Monday) that an ECB Quantitative Easing programme must not be dictated by the concerns of Germany.
“The role of the ECB is not to act in the interest of one country but to work through agreed consensus to arrive at a solution that works for all Euro area Member States,” said Mr. Hayes.
“It has been suggested that to appease Germany, the burden of risk for a Quantitative Easing programme could fall on national central banks rather than the ECB. This would essentially be a watered-down version of Quantitative Easing and would not address the concerns about the cross-border effects of monetary policy.”
“For Quantitative Easing to be effective, the ECB needs to carry it out on a full scale, in a similar way as the US has done to good effect. It is impossible to isolate the default risk to one central bank since we have an interconnected monetary system and leaving national central banks to take on such risk is potentially very dangerous.”
“Mario Draghi previously said that the ECB is prepared to do whatever it takes to preserve the euro. It is clear that to prevent a spiral of deflation, we need to take swift action and full-scale Quantitative Easing could be a key instrument that turns the corner for the Euro.”
“It is important that countries like Ireland who have made so many structural changes can see the positive signs of the Eurozone returning to a steady rate of growth. At the moment, we don’t see that in the Eurozone and we need larger Member States like Germany to recognise that it is in their interest to see others return to growth as quickly as possible,” concluded Mr. Hayes.