- Pierre Moscovici, European Union Commissioner
Moody's Analytics warned that the European Central Bank's QE worth 60 billion euros a month might be fuelling housing bubble in the UK, Germany and Norway. The QE programme is intended to inject new, cheap money into the European financial system through a series of asset purchases to bolster uneven and fragile Euro zone's economy. Yet, the central bank cannot guarantee that money is invested in areas where it may be needed the most. Thus, borrowers attracted by easy money and low interest rates on mortgages appeared to be home buyers in Northern Europe. According to Moody's calculations, average house prices in Norway have swollen more than 30%, in Germany by nearly a quarter, and in the UK by almost 15% since 2010.
Meanwhile, Athens submitted legislation to parliament on Tuesday required by international lenders to begin negotiation on a multi-billion euro rescue package. Prime Minister Alexis Tsipras has until Wednesday night to get those measures adopted in the assembly. In the meantime, Economic and Monetary Affairs Commissioner Pierre Moscovici said if the Greek government can deliver on the terms of its third bailout agreement, the country's creditors are ready to provide the much discussed debt relief. The International Monetary Fund has called for Euro zone governments to reduce Greece's debt, saying it is one of the prerequisites to boost the country's economic performance.
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