The European Central Bank faces a crucial test of its resolve to do “whatever it takes” to preserve the euro when it decides this week on buying government bonds to combat deflation and revive the economy.
The EU top court’s adviser and the Swiss National Bank have smoothed the way for quantitative easing (QE), or printing money, but fierce opposition from Germany’s central bank, politicians and public may yet shackle the ECB.
At issue is no longer whether the bank buys sovereign bonds, which has been widely flagged, but how the program is designed and whether it is seen as credible and sufficient.
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