The European Central Bank’s policy of quantitative easing is having the desired effects on the euro-area economy and is “definitely compatible” with what the U.S. Federal Reserve is doing to withdraw monetary stimulus, Luxembourg Finance Minister Pierre Gramegna said.
QE in the euro area “is really working” as it has provided enough liquidity since March, especially in those euro countries where credit wasn’t available in enough quantity, Gramegna said in a Bloomberg Television interview in Ankara. In the U.S., interest rates have to rise eventually, said Gramegna, who represents the European Union at a meeting of finance chiefs from the Group of 20 in the Turkish capital.
“We can’t live on a permanent basis with extremely low interest rates” in the U.S., Gramegna said. QE is continuing in the euro region “because we need it, we need to relaunch the economy. Quantitative easing is producing its effects, and more is better.”
Incoming data show that the 19-nation euro-area economy is in better shape than it has been for years, though improving at a slower pace than the ECB had predicted. With the central bank’s asset-purchase program having only just started, the transmission of monetary-policy stimulus may take longer than thought to impact the real economy.