The ECB opens the taps – Swedish newspaper Svenska Dagbladet

Rain stands since last year that the ECB is preparing quantitative easing euro-zone totaling over a thousand billion until September 2016. It is one of the main reasons why stock markets yesterday as the train – despite the fragile economic in Europe and slower growth in China.

However, there has so far been unclear how the purchases are made, exactly when to start, the assets to be bought and under which conditions the program may continue even after the fall 2016.

But after Thursday’s ECB meeting begins to settle. First, the program starts already on Monday when the ECB starts buying government securities from the euro zone on the open market, not directly from the respective state.

ECB president Mario Draghi confirms, secondly, that the program will continue until the ECB sees an adaptation of the now record low inflation levels around the central bank’s target of “below but close to 2 percent” in the medium term.

The conclusion is complete. With an inflation rate of -0.3 percent in February and Thursday’s fresh ECB forecast of 0.0 percent in 2015, 1.5 percent in 2016 and 1.8 percent in 2017 would Governing purchases hardly an end in September next year. Zero percent inflation this year also means that the ECB strongly writes down its forecast. As late as December counted Central Bank by 0.7 percent.

The declining or low prices is the main reason why the ECB opens the money taps. Economy improves admittedly, but not enough to cause prices to return to desired levels.

In 2015, the Governing economists now with a GDP growth of 1.5 percent for 2016 of 1.9 percent in 2017 of 2.1 percent. For the current year, it means write-up of the December forecast by half a percentage point. According to Draghi, because of the low oil prices and increased competitiveness in the euro zone as a result of falling costs.

The positive economic figures means, thirdly, that the ECB understands that quantitative easing will spread to the real economy faster and more efficiently than many on the market expects. Several bank economists were on Thursday surprised by the bank’s optimism.

Many also warns that the ECB’s stimulus comes too late and that the markets will have trouble absorbing 60 billion a month when interest rates are ultra low or negative.

Why sell bonds with interest coupons that most people today can only dream of? According to JP Morgan has today European sovereign debt equivalent to 1 500 billion a negative return. Two-thirds of German bonds in the Bloomberg index, according to Mohamed El-Erian of Allianz negative return. In the worst cases it may be an empty gesture.

A final ambiguity Mario Draghi has now been cleared away is; fourth, the Greek and Cypriot government securities should be treated and which support the new left government in Athens can count on. “We are not only the Bank of Greece,” reads the Governing manager’s meager response. The ceiling for emergency loans to banks increased admittedly. But the ECB will not buy Greek or Cypriot government bonds.

There remains, finally, that the ECB is now increasing its stimulus while the Federal Reserve is expected to raise interest rates in the middle of the year and the Bank of England towards the end of the year. Euro course teaches sink and competitiveness – probably not entirely without intention.