ECONOMIC OUTLOOK
President of the ECB, Mario Draghi
C Europe’s economic situation today and the role of QE
urrently, in 2015, deflation could be described as the biggest economic problem of Europe. Primarily, according to deflation’sdefinition, the average of the prices of products and services, instead of going up every year, they fall. This phenomenon occurs because citizens suspend purchases, waiting for prices to fall even further (also due to their lower purchasing disposable income), resulting to reduced income in state funds, output gap in the economy and postponementof taking investment initiatives.This, however, implies a deterioration of stagnation in the real economy and the rising of unemployment.
By Dr. Antonis Zairis and George Zairis*
14
EUROPEANBUSINESSREVIEW
The president of the European Central Bank (ECB), Mario Draghi, is attempting to change this situation through quantitative easing (QE), i.e. of the monetary policy which is being exercised by the Central Bank, by creating money through the securities market, such as the government bonds. In 2012, Draghi said that “The ECB is ready to do whatever it takes to preserve the euro”. Almost three years later, we could say that Draghihas not breached his words since the euro ‘bore’ the years of the great crisis of the financial sector. However, difficulties still continueinalargescale.