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EEuropean Central bank boosts economic growth in Europe

PostPosted: Fri Oct 31, 2014 5:46 am
by lebanese
In an effort to stimulate economic growth in European Union, the European Central bank has bought in the previous days some Italian bonds in a effort to increase household and corporate financing availability. In that way, ECU can reduce the cost of borrowing money for companies to increase productivity and create jobs leading to diminished or reduced unemployment rate in Europe and encouraging economic growth at the same time.

Less interest rates in Europe can encourage families to get cheaper loans and give support to consumption and economic speed. This can increase prices and inflation which is currently much lower than the 2 % goal set by the European central bank. The process of buying European bonds or quantitative ease has caused the interest rates to slide down in many European countries especially in Southern Europe like Italy, Greece, Spain and Portugal. This Can reduce cost of private and public debt in these countries whose markets will obtain more confidence when backed up by European central bank.