It has been almost two years since the European Central Bank launched its quantitative easing program in an attempt to increase inflation and boost the Eurozone economy. Has the program been effective and will the ECB extend it?

80 Billion Euros per month. In March 2015, the European Central Bank launched a massive programme to buy sovereign and private debts from Eurozone banks. The aim of Quantitative Easing is to inject liquidity into the monetary system, increase inflation and to exit the deflationary spectrum. All of this creates a ripple effect that can help boost growth.

But 20 months after launching the monetary easing programme, does it still hold merit?

“It helps governments but in the same time we do not see inflation which means we need more quantitative easing than us to have. I am pretty sure the ECB will continue to print money. Originally the idea was to stop the program by march next year. But I think they will express and extension of the program until September next year. Which means that in total more than two trillions euros will have been printed by the ECB.” said Bruno Colmant,economic expert of Bank Degroog Petercam.

The European Central Bank uses all conventional monetary tools available to keep inflation down. Today the rate of inflation for the Eurozone sits at 0% . What this means is that the cost of borrowing money is zero. But despite their efforts, Eurozone economies are still struggling.

“At our monetary policy meeting in December, we will assess the various options that would allow the governing council to preserve the very substantial degree of monetary accommodation necessary to secure the sustained converge of inflation towards level below or close to 2% over the medium term.”said Mario Draghi,president of European Central Bank.
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The Board of Governors of the European Central Bank will meet on December 8th. Their decision? To see whether the programme to repurchase debts in secondary markets should be extended beyond March 2017.