The ECB has missed another prime opportunity to ease policy
again. Easier policy is long overdue. The Eurozone economy has been crying out
for greater monetary stimulus for a long while. The economy is sliding towards
deflation. Unemployment is close to a record high at 12%. And the recovery is
flagging. Weaker parts of the Eurozone could easily slide back into recession.
Easier policy will help to take the edge off the strong euro, providing a vital
boost to the export sector. It looks like the ECB has failed to learn the error
of its ways. It has slipped back into a cautious vein, preferring to wait and
see, when the economy really needs some proactive policy response. It is
pointless the ECB talking and hinting easier policy ahead and not coming up
with the goods. It smacks of indecision. It is even more of a wasted
opportunity as the Bundesbank has provided really clear signals that the ECB is
good to go again with easing. It looks like the ECB will drag things out to the
last minute at the recovery’s expense.
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