Yesterday, the European Central Bank (ECB) announced a $1.16 trillion program to increase optimism about central-bank stimulus in hopes of boosting economic growth. The euro fell to an 11-year low and U.S. equities dropped. The plan is to print lots of euros to buy government bonds, which means that having more euros in the market will make the currency less expensive and it will encourage people and companies to want to borrow, invest, and spend. Quantitative easing should aid the Eurozone’s revival by lowering the euro in comparison to other major currencies in hopes of helping exporters and increasing output. Established by ECB President Mario Draghi, this is known as quantitative easing. This will allow a fresh start for the central bank after a year of attempts to revive the stagnant Eurozone economy. Furthermore, each of the 19 countries in the Eurozone will purchase its own government’s bonds. The ECB’s economic revival program is aggressive, but hopefully, it will keep Europe’s economy in line.
Contributor: Chelsea Edirisuriya