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Draghi: ECB ready to initiate QE to counter low inflation

02 Jan 2015

In an interview with Handelsblatt, ECB President Mario Draghi warned that persistently low inflation in the Eurozone meant that “the risk that we do not fulfill our mandate of price stability is higher than six months ago”. Draghi reiterated that the ECB was ready to step in with a programme of Quantitative Easing, noting that "We are in technical preparations to adjust the scope, speed and composition of our measures for early 2015.” Draghi also argued that politicians in the Eurozone member states needed to do more to push through structural reforms, reduce the burden of taxation and cut red tape.

Meanwhile, today’s PMI figures showed that manufacturing in the Eurozone continued to struggle with Italy falling to a 19 month low although Germany saw a limited recovery with manufacturing hitting a two-month high.
Handelsblatt Reuters Telegraph

German Chancellor Angela Merkel will visit the UK on January 7 where she will meet with British Prime Minister David Cameron to discuss European and international issues.
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The FT reports that according to party insiders, UKIP will unveil a series of new policies in the coming weeks aimed at combating the accusation that the party is “more Tory than the Tories”, and attracting further disgruntled Labour supporters. These include ring-fencing the spending on the NHS, raising the income tax threshold for lower earners and opposing a new runway at Heathrow.

Kathimerini reports that several MPs from Greece’s anti-austerity SYRIZA party have argued that if the party were to take office following the snap elections on January 25 but would fail to meet its manifesto commitment of negotiating a new debt-relief agreement with the Eurozone, they would consider unilaterally halting the repayment of Greek debt.
Kathimerini Open Europe blog  

In a New Year message which was welcomed by the SPD, Greens and Die Linke, Chancellor Angela Merkel accused the organisers of the recent anti-Islamification protests in Germany as having hearts “often full of prejudice, and even hate”. FAZ’s domestic affairs editor Jasper von Altenbockum argues that Merkel’s intervention will be “like honey” for the anti-euro Alternative für Deutschland which is also seeking to tap into concerns about immigration.
FT FAZ FAZ: von Altenbockum

The Telegraph reports that e-books are set to become more expensive due to new EU rules that require digital services to include VAT at the rate of the customer’s home country, and not the rate which applies where the business is based. The rules form part of a drive to harmonise taxes across the continent and curb the benefits for large companies like Amazon from diverting sales through low-tax states.

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