- Matteo Cominetta, European economist at HSBC Holdings Plc
During the last five years European policymakers have resisted to launch their own quantitative easing programme. After a recent cut of interest rates, Mario Draghi is unlikely to announce any additional liquidity injections during the next month. Moreover, the latest poll conducted by Bloomberg shows that 77% of respondents expect the announcement of long-term loans not earlier that in the first of second quarter of 2014. With interest rates close to zero analysts are making their bets on how far the ECB is prepared to go if inflation slows further.
The 17-nation economy expanded by just 0.1% in the third quarter, at the pace well below levels seen in the U.S., Japan or the U.K. In addition to that, worrying sign came from France, where economy contracted 0.1%. These figures could be interpreted as a failure of austerity measures and structural reforms, and as a sign that the ECB could stick to other measures. While money-printing is beneficial for the economy, a research conducted by the McKinsey Global Institute found other side of this measure. The main beneficiaries of stimulus programmes are governments, which see their borrowing costs driven down, while wealthy people's assets are rising, fuelling inequality. The main losers however, are savers, pensioners and ordinary workers, who are experiencing prices increases without a corresponding growth in wages.
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