There’s a return to healthy growth in the eurozone. Surprised? It’s called the QE bounce.
First the head of the central bank says he will inject £1.1tn into the 19-member economic bloc under a programme of quantitative easing (QE). Next, bank lending gets easier. More importantly, businesses breathe a sigh of relief, realising that after four years of austerity someone has put serious money behind the eurozone’s recovery.
Without downplaying the effect of low oil prices on consumer spending, it is the invisible hand of European Central Bank boss Mario Draghi – working the credit levers to make lending cheaper – that has done the trick.
So now Italy is back in the growth league with a 0.3% rise in GDP in the first quarter, the same as the UK, while France accelerated 0.6%.
It took German-led Europe 7 years of pain and an Italian ECB chief to start QE. Pragmatic Americans have done it from day one. Shame on Frankfurt…