DUBLIN:Ireland central bank (ECB) has announced an historic measure in an attempt to boost the euro zone economy.
European countries should follow Ireland’s example on austerity, according to one of Europe’s most influential economists.
ECB President Mario Draghi announced a full-scale quantitative easing programme – a move which is set to see €1.1 trillion being injected into the euro zone economy.
Speaking on RTÉ’s Prime Time, Hans-Werner Sinn, the president of Germany’s Ifo Institute for Economic Research think-tank, said printing money would not solve the Eurozone crisis.
“The other European countries in southern Europe say we do not want to repeat the Irish austerity path, there is another possibility. We solve more problems with a printing press. Is that really the right approach?.
“The money out of the printing press alleviates the pain but if it does so, there is not enough pressure to do a reform. I can only recommend everyone to follow the Irish example.”
“You would think that Greece would now be out of the woods or be recovering but it is not. They still have mass unemployment of more that 25 per cent and 50 per cent youth unemployment. The unemployment is twice as high as it was in 2010 when we first discussed the Grexit option so obviously this whole policy does not function, it does not work.”
Quantitative easing will involve the ECB going into the market and buying €60 billion of assets, mainly Government bonds, every month in a bid to inject cash into the economy.
The scheme is being resisted in Germany over concerns that ECB bond buying would ease pressure on countries to assert control over their public finances.
