ECB QE Is Dead. Long Live ECB Stimulus
The end of bond purchases is nigh, but officials need to find a way to maintain support for troubled countries.
Don’t leave us.
Photographer: Giulio Napolitano/BloombergThe hawks at the European Central Bank are making their presence felt. They want the policy meeting in Latvia on June 14 to be a "live" meeting for deciding on the end of quantitative easing, rather than yet another showcase for stalling and delay. And it looks likely they’ll get their way – Chief Economist Peter Praet said in a speech in Berlin on Wednesday that policy makers will have to assess the matter.
This development has been a long time coming, and it’s a mark of how much the European economy has improved. But this does not mean ECB stimulus will, or should, stop. A renewed selloff in shorter-dated Italian bonds shows the central bank must tread very carefully.