The European Central Bank decided to embark in a large program of asset purchases because of deteriorating expectations on inflation over a number of years, ECB Executive Board Member Benoit Coeure said on Thursday.
Speaking at an event here, Mr Coeure said he is confident the recently launched, so-called quantitative easing by the ECB will succeed. “It will work because it’s big,” he said.
But the central bank official reiterated the ECB cannot do everything to fix the euro-zone’s sluggish economy. Governments have to do their part with structural reforms, a message some members of central bank’s board have stressed.
Mr. Coeure added that the ECB’s decision on the purchases was vindicated by general comments noting that “the ECB had done what it had to do,” according to its mandate. The ECB has a mandate to keep the euro-zone inflation rate close to, but below 2%.
The bank recently decided to buy 60 billion euros ($68 billion) of government bonds and other assets each month to inject liquidity in the euro-zone system and rekindle economic growth.