VIENNA (Reuters) - The European Central Bank might have been better off waiting to start an expanded asset-buying programme, ECB Governing Council member Ewald Nowotny said after the ECB launched a bold programme to reflate a sagging euro zone economy.
While the quantitative easing (QE) scheme will help revive the euro zone economy and ward off deflation, it would make sense to wait and see the impact of the ECB’s existing stimulus measures, Nowotny told Austrian broadcaster ORF on Thursday.
“One has to be aware that we have more or less shot our last wad and in my view one always has to be very careful there. I personally would have suggested thinking about this programme but waiting a bit (to see) if we really need it.”
Nowotny, who is also head of the Austrian central bank, added: “The immediate effect (of QE) is that it could come to a further depreciation of the euro. That per se is not an unfavourable development for Austria” because it can help exports and secure jobs.
Asked about the volume of the new scheme that prints money to buy 60 billion euros ($68 billion) worth of assets a month through September 2016, he said:
“The argument is that one should really impress the markets and that works of course only with very large sums. I personally am of the opinion that one shouldn’t be pushed around by markets all that much”.
The asset purchases from March will be split up according to a formula based on euro zone members’ shares of ECB capital. The Austrian central bank owns 2.8 percent.
“That means the Austrian National Bank will buy around 3 billion in government paper every month. That will be primarily Austrian state securities,” he said.
Reporting by Michael Shields and Angelika Gruber; Editing by Mark Heinrich