Image: © European Central Bank via Flickr

Europe’s central bank has finally stopped ‘quantitative easing’

Now we can all stop trying and failing to even pronounce the thing, let alone understand it

Draghi, the President of Europe's central bank (the ones that print the money and control the interest rate, among other things), seems to feel Europe's on the up – so he's stopped pumping money into it.

What it means: Trying to learn how to say 'quantitative easing'  is like learning how many 'na's there are in banana before it's time to stop all over again.

'Quantittatitative easing', or 'quantitative easing', is the policy whereby central banks buy up what are essentially like shares in a government, called 'bonds', from banks. If banks have more $$, they can lower interest rates (because they're already getting enough from the bond sales). That makes it cheaper to borrow money, and the hope is people will end up spending more (because money is 'cheaper' as a result of all this).

The UK, US, and EU all did it after the crash, but it was all very controversial and the UK and US have already stopped the policy. The ECB has just followed suit yesterday – until now, they've been buying €30bn worth of bonds from banks per month; they're lowering it to €15bn and phasing it out by the end of the year.

Some people think it's a bad idea given the EU's not really sure who its friends are at the moment and an anti-EU party just got elected in Italiy. But Draghi, who runs the show, seems to think things are stable, so he's ready to stop adding that extra money into the system.

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Reader Comments

  • WhereAreTheVikings

    What a terrible, terrible shame. Western Civilization nurtured capitalism, and now capitalism is destroying it. And these young people seem to welcome the invasion of their homeland. The media and schools have been very efficient in wiping out all traces of blood and soil.

    • prollawalllynotahumanoid

      Capitalism isn’t the problem. It’s corrupt politicians taking bribes and kickbacks from Globalists and the Chinese.

      • WhereAreTheVikings

        Maybe I should have said crony capitalism. Although Italians importing Chinese to make “Italian leather” shoes is not crony capitalism. It is capitalism, pure and simple.

        • prollawalllynotahumanoid

          That would be crony capitalism and globalism combined. They aren’t concerned with the affect their policies have upon their citizens, the health and welfare of their society and culture or their economy. What it isn’t is fair-free trade to further national interests.

          • WhereAreTheVikings

            I’ve always seen them as one and the same, but perhaps they need to be named individually, just to bring home the point.

      • WhereAreTheVikings

        But now that travel is so easy and borders are virtually down through H1bs and the like, theoretically you can’t blame capitalists for the pursuit of cheaper labor, although I do heartily blame them not being more patriotic than that. Perhaps the emerging nationalism will force them to voluntarily do what they should have morally been doing all along, and that is employing business practices that preserve their countries and nationalities. The government should be doing everything it can to encourage that, to the extent that small government should do anything but guard the borders and strictly, drastically, limit immigration.

      • Henry Lam

        It is China with its corrupted mindset affecting the world.

        • prollawalllynotahumanoid

          No it is not. Capitalism is the fairest and least corrupt system of all.

          Socialism and communism is based on authoritarianism, coercion and police intimidation. It has and always will be rife with criminality, bribes and kickbacks.

          Corruption can be anywhere but it is the very basis of socialism and communism.

    • Henry Lam

      The government is too weak. They do not understand the mindset of communists and how they educate their people. Those communist people are only loyal to their country and could be dangerous. The immigration law should only accept those who accepted multiculturalism and taught from a democratic education system. This virus events clearly has shown how stupid to take China as a friend.

      • WhereAreTheVikings

        The government is not too weak. Just weak-minded about some things.

  • Gabi Rodrigues

    For how many days can a country maximum close their borders to foreigners maximum? Like now, with the virus, everyone is using 30 days. Can it be more?