Varoufakis Proposes EIB Bonds to Drive EU Growth as QE Will Fail
2015-03-14 11:17:15.13 GMT
By Jenny Paris
(Bloomberg) -- ECB’s QE will prove unsuccessful in
stimulating an investment-led recovery in Europe as it will lead
to inflated asset prices and excess demand that isn’t met by
supply, Greek Finance Minister Yanis Varoufakis tells an
economic symposium in Cernobbio Italy.
* QE could prove both unsustainable and incapable of boosting
private credit growth and investment in productive
activities
* Proposes instead the creation of EIB bonds that will finance
European growth with ECB standing by to purchase these bonds
* “Imagine an alternative plan to QE where the EIB will take
its marching orders to lead an investment-led recovery for
Europe,” Varoufakis says; “I’d like to call that the
Merkel plan”
* It would solve operational problems of ECB because it would
buy only one, triple-A rated European paper, and avoids
problems faced with QE elsewhere of inflating asset prices
and failing to drive investments
* QE is bound to prove worse in a fragmented and fragmenting
euro zone
* Crisis getting worse, not better in my estimation; it’s a
challenge no Keynesian stimulus can meet
* Need to escape prison of false dilemmas, choices between
stabilty and growth, between austerity and stimulus
* “Risk is a toxic democratic deficit from which only
populists, nationalists, federalists, and indeed in my
country, nazis profit from”
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To contact Bloomberg News staff for this story:
Jenny Paris in London at +44-20-3525-4044 or
jparis20@bloomberg.net
To contact the editor responsible for this story:
Andrew Rummer at +44-20-3525-3722 or
arummer@bloomberg.net
2015-03-14 11:17:15.13 GMT
By Jenny Paris
(Bloomberg) -- ECB’s QE will prove unsuccessful in
stimulating an investment-led recovery in Europe as it will lead
to inflated asset prices and excess demand that isn’t met by
supply, Greek Finance Minister Yanis Varoufakis tells an
economic symposium in Cernobbio Italy.
* QE could prove both unsustainable and incapable of boosting
private credit growth and investment in productive
activities
* Proposes instead the creation of EIB bonds that will finance
European growth with ECB standing by to purchase these bonds
* “Imagine an alternative plan to QE where the EIB will take
its marching orders to lead an investment-led recovery for
Europe,” Varoufakis says; “I’d like to call that the
Merkel plan”
* It would solve operational problems of ECB because it would
buy only one, triple-A rated European paper, and avoids
problems faced with QE elsewhere of inflating asset prices
and failing to drive investments
* QE is bound to prove worse in a fragmented and fragmenting
euro zone
* Crisis getting worse, not better in my estimation; it’s a
challenge no Keynesian stimulus can meet
* Need to escape prison of false dilemmas, choices between
stabilty and growth, between austerity and stimulus
* “Risk is a toxic democratic deficit from which only
populists, nationalists, federalists, and indeed in my
country, nazis profit from”
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact Bloomberg News staff for this story:
Jenny Paris in London at +44-20-3525-4044 or
jparis20@bloomberg.net
To contact the editor responsible for this story:
Andrew Rummer at +44-20-3525-3722 or
arummer@bloomberg.net