Bloomberg note European Central Bank President Draghi has a month now to build consensus on quantitative easing.
The ECB will consider QE at the meeting scheduled for January 22:
- “In case of sovereign QE, it’ll be difficult to square the circle to make everybody happy,” said Marco Valli, an economist at UniCredit SpA in Milan. “But they are trying to make it as consensual as possible, bringing on board some of the smaller states. It would be important for the credibility of any sovereign QE program to reduce dissent as much as possible.”
The Wall Street Journal, meanwhile, says that the Bundesbank’s “long campaign to prevent the European Central Bank buying government bonds stands on the brink of failure”. Bundesbank President Jens Weidmann no longer rejects QE, accepting it might be necessary to tackle deflation, but questions whether it is necessary now:
- core inflation is steady at 0.7% and long-term inflation expectations remain close to 2%
- In Spain, where prices are falling fastest, consumer spending is growing strongly
- The Bundesbank expects falling oil prices to boost eurozone growth
But … “the ECB Governing Council now appears near-certain to launch a government bond-buying program at its next meeting … according to people familiar with its deliberations”.
More at the Bloomberg article here: Draghi Starts Squaring QE Circle in Month of Persuasion for ECB
And at the Wall Street Journal article (which may be gated), here: Not Quite Checkmate for the Bundesbank
Germany Appears Defeated Over QE, But Might Still Dictate Terms of Surrender
![Draghman or Weidhi?](http://az705044.vo.msecnd.net/20141222/Draghi-Weidmann.png)
Draghman or Weidhi?