Speaking at a press conference on Thursday 5 March, ECB President Mario Draghi confirmed that the eurozone´s central bank will launch its QE program today (Monday 9 March). Acting through central banks of the Eurosystem, the ECB will pump €60 billion to the economy each month, at least until September 2016, but possibly beyond that. The goal of the quantitative easing program is to bring inflation up from the red numbers, closer to the 2% target. Recent data show that the eurozone slipped into deflation and the ECB wants to counter it. Altogether, the ECB plans to purchase €1.14 trillion worth of eurozone bonds and other assets. QE is considered a last-resort option. It is a massive scape operation with many risks. But experts agree that the ECB had little choice. Its main interest rate has been on record lows for a long time, it is currently 0.05%, but inflation is still dangerously low, or negative.

The ECB announced that it increased the limit for the Greek central bank for refinancing loans for Greek banks by €500 million. Some weeks ago, in reaction to the outcome of Greek elections and victory of SYRIZA, the eurozone´s central bank stopped to take Greek junk-rate bonds as collateral for loans for Greek commercial banks, effectively cutting them from a crucial source of financing. Greek banking system is fragile and without access to refinancing from the ECB, it would collapse very quickly. The Greek central bank continues to refinance, but under less favorable conditions, and even these transactions are subject to ECB´s approval. It has therefore a very powerful stick it can use to counter the Greek government.

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