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The European Central Bank is signalling that it intends to end its €2.5tn quantitative easing programme next month. Mario Draghi, ECB president, made that clear at the bank’s monthly meeting in October.
Yet the recent eurozone growth numbers were the weakest since 2014. The danger for the ECB is that it will have to start QE up again soon after ending it.
Germany and Italy are the principal culprits here. In the third quarter of 2018, German car production and exports were disappointing, largely because of the emissions scandal. This is expected to be temporary.
But the US-China trade dispute, which is not going away, is having an impact on German exports. And with the Italian economy stagnating, the strong and the weak are conspiring to make QE as important as ever for the health of the European economy. Y
et, the ECB says it wants to end the asset purchase programme before the fourth-quarter results are in. What’s the hurry? [...]
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