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THE European Union’s central bank announced today that it was ending its stimulus programme said to have helped put more than nine million people into work across the EU.
European Central Bank bond purchases began in March 2015 to help EU member states’ hesitant emergence from a debt crisis that threatened to break up the 19-country eurozone.
ECB president Mario Draghi boasted that, at the time, the bank “was the only driver of the recovery” in the absence of other action by governments, such as increased public spending.
Today’s decision to stop the bank’s monthly bond purchases at the end of the year ends a 2.6 trillion euro effort.
The ECB says it can phase out the stimulus because the economy is growing steadily and inflation nearing its goal of just under 2 per cent.
Economic growth in the third quarter slowed to only 0.2 per cent from the quarter before, well down from higher rates at the end of last year.
By exiting the programme, the ECB is joining a retreat by the US Federal Reserve and the Bank of England from stimulus efforts deployed in the years following the global financial crisis of 2007-2009 and subsequent recession.
The Federal Reserve is further along, having ended its own bond purchases and already started raising interest rates.
The programme and its legacy remain controversial, especially in largest eurozone member state, Germany, which criticised the stimulus packages for easing pressure on governments such as Italy to tackle budget debts by artificially lowering their borrowing costs.
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