Some ECB Governors Said to Have Pushed for 12-Month QE ExtensionBy
Southern European officials saw need for more stimulus
Bundesbank’s Weidmann said to warn against overcommitting
European Central Bank policy makers from the euro area’s south argued in favor of a longer extension of asset purchases, according to people familiar with the debate.
The Governing Council members proposed continuing quantitative easing for another 12 months after March, three months more than the longest option presented by ECB Chief Economist Peter Praet at the meeting, according to the people, who asked not to be identified because the deliberations are private. An ECB spokesman declined to comment.
The Frankfurt-based central bank decided to extend the asset plan by nine months until December 2017, though it reduced the pace of monthly purchases to 60 billion euros ($64 billion). Another scenario considered was a six-month extension at the current 80 billion-euro pace -- a path predicted by most economists surveyed by Bloomberg ahead of the announcement.
The decision was taken by “very, very broad consensus,” ECB President Mario Draghi said at a press conference in Frankfurt after it was announced. He also presented new forecasts that see euro-area inflation accelerating to 1.7 percent in 2019 from 0.2 percent this year.
During the council discussion, Bundesbank President Jens Weidmann raised concerns over committing to substantial amounts of stimulus for the next 12 months, suggesting that such a pledge may limit the ECB’s scope to react to incoming economic data, according to one of the people.
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