ECB officials defend stimulus to respond to slowdown

It was an appropriate action by Euro-area official to defend their monetary policy action by revising the guidance and stressing the new long-term loans package. Current data stated that it is become a doubt picture of the economic affairs of Euro area’s state.

The European Central Bank (ECB) give their respond toward the region’s economic slowdown by announcing a series of long-term bank funding and keep the interest of their rock-bottom level through this promising series. However, the ECB still confident even the rebound itself would happen. Unfortunately, the policy makers were not confident on how strong the region’s economic slowdown will be and when it will happen.

The rising of protectionism and the uncertainties of United Kingdom exit from European union has become the reason on how Yves Mersch keep buying an insurance in case of the downward risks. The Euro area will face a significant slowdown and the ECB wanted to show it without overreacting.

The investors and economist give a warm response toward the central bank’s package of measure. The reason of their warm responses is that, the new funding hopefully will be made available on less favorable terms than in the past.

The detail of the program would be presented as soon as the Governing Council feels prepared and comfortable. “The program needs to be well-prepared if it wants to be a successful program” said Ewald Nowotny. More information of this program might come in April. The Lithuanian Governing Council member Vitas Vasiliauskas said that “we still have much time until September to release the detail of this program”.

 

Source:Jakarta Post, Monday March 11, 2019 by Catherine Bosley and Stephanie Bodoni