Aberdeen comments on ECB stimulus

Following the confirmation of ECB stimulus Aberdeen Asset Management Investment Manager Luke Bartholomew commented:

"Markets will cheer the fact that the ECB is going to be buying bonds on this scale, which is ahead of expectations and with a hint of being open-ended. The euro has sold off and QE should further lift asset prices. But the decision that the ECB will only shoulder 20% of the debt on their balance sheet is odd. Those who were against QE did so partly because they didn't want all the risk on the books of the ECB. They seem to have won a concession in order for backing QE of this scale. We all know that greater fiscal union is critical for the long term future of the euro so the fact that Draghi couldn’t win support for full burden sharing isn’t an encouraging sign for the long run".

“We shouldn’t get carried away with the scale. It may boost inflation expectations at the margin, but will probably only have a small positive effect on Europe’s real economy. A weaker euro should help exports a little, but it won’t suddenly make European economies much more competitive. That urgently requires structural reforms which European leaders seem unwilling to push through .Once the initial volatility has passed, we may be asking ourselves what we spent all this time waiting for.”