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European monetary policy has boosted stockmarkets and weakened the euro
ONCE again Mario Draghi, the president of the European Central Bank, is living up to his “Super Mario” nickname. In 2012 he stabilised markets with his pledge to do “whatever it takes” to save the euro. This year he has pulled off a similar trick by adopting quantitative easing—the printing of money to buy assets. This week the ECB started buying government bonds; it was already snapping up asset-backed securities and covered bonds.
The announcement of QE in late January helped revive investor sentiment after a tricky start to the year. Global stockmarkets rose by 5.3% in February, according to Standard & Poor’s, with four in the euro zone (Austria, Greece, Portugal and Ireland) posting double-digit gains.
Easier monetary policy is not the only factor behind the rally. Investors were relieved when Greece and its creditors agreed on a four-month extension of its loan programme. That reduced the risk of a …<div class="og_rss_groups"></div>