One thing everyone seems to agree on is that the Eurozone economy is barely keeping its head above water. There seems to be less consensus on what to do about it. The ECB keeps talking about a new stimulus program, but never actually does it.
It's pretty clear there are strong divisions of opinion and something that makes the EU different from the US. Each EU nation still has its own Central Bank and its own governing bodies. If it's hard to get agreement in the US, imagine trying to get it in the EU. Some articles linked below bring us up to date. Under each link are a couple of key quotes.
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ECB's Draghi Hints at More Stimulus - NY Times
"Mr. Draghi and the central bank did not take concrete action on Thursday. Instead, he offered assurances that more aggressive stimulus was just around the corner, perhaps the type of large-scale bond purchases used by the United States Federal Reserve."
"The question is how long the European Central Bank and Mr. Draghi can merely hint at actions yet to come. There were already signs of doubt on Thursday, as European stocks were down broadly even before Mr. Draghi’s news conference ended."
“At some point, they will lose credibility,” said Mark Zandi, chief economist at Moody’s Analytics. “They still have time, but time is running out.”
"And Mr. Draghi refused to specify what kind of assets the central bank was likely to buy, saying only that many options had been discussed. He did not commit to taking action in January, when the governing council will next meet on monetary policy."
Germany Says No Thanks to More Stimulus - Reuters
"The head of Germany's Bundesbank warned the European Central Bank on Friday against copying the money printing used in the United States and Japan, saying that it would not have the same impact in Europe.
Speaking a day after ECB President Mario Draghi signalled further action to shore up the euro zone economy as soon as early next year, Jens Weidmann cautioned that so-called quantitative easing may not work in Europe.
"You cannot simply apply the same formula in Europe that has enjoyed success in the U.S. or in Japan," Weidmann told a conference in Frankfurt, commenting on the prospect of further money printing to buy assets such as state bonds.
"In the USA, there is a central state that issues bonds that are very safe and secure. We don't have that central state here," said Weidmann, who also cautioned that making it too cheap for countries to borrow could discourage them from reforming."
Draghi Opens Door to More Stimulus, But not Yet - Wall Street Journal
"The European Central Bank opened the door to a dramatic escalation in its campaign to stimulate the eurozone’s stagnant economy, but deferred any moves until early 2015 amid signs of continuing divisions over the right course of action.
ECB President Mario Draghi said Thursday that officials discussed purchases of government bonds, otherwise known as quantitative easing, a move that would mark a new chapter in the bank’s fight against excessively weak inflation. But he added they needed more time to gauge the effects of policies that they had already implemented while assessing how falling oil prices might affect the region’s already weak consumer prices.
“We discussed the possibility of doing QE” with buying government bonds “as one option,” Mr. Draghi said after the ECB left its key interest rates unchanged at record lows at the bank’s monthly meeting. The ECB will reassess its policies early next year and decide whether it needs to do more, Mr. Draghi said, raising expectations that the ECB could act as soon as its next policy meeting on Jan. 22, although he didn’t commit to a time frame."
-----------------------------------------------------------------------------------------My added comments:
Everyone seems to need more time until 2015 to see how things are going. 2015 continues to look like it will be an interesting year around the world.
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