Portugal, mired in recession and propped up by international aid, rejected calls on Friday for the European Central Bank to turn to the printing presses to boost economic growth in the eurozone. Many economists, along with French President Nicolas Sarkozy, have said the ECB needs to adopt a programme of asset purchases like the US Federal Reserve and the Bank of England to help drag the single currency area out of its debt crisis.
But Portuguese Prime Minister Pedro Passos Coelho, whose country is caught in a deep economic slump after receiving a 78-billion-euro bailout from the European Union and IMF, said money printing by the ECB was not a solution. "I don't want the ECB to function in Europe like the Federal Reserve functions in the United States or like the Bank of England," he said. "These countries also have debts and deficits and are also enacting recessive measures. If the origin of this crisis is financial, much of it is also due to central bank policies."
Ireland, another eurozone country to receive a bailout, has urged the ECB to become the lender of last resort to solve the crisis. But Passos Coelho's comments suggest he is falling into line with Germany's opposition against more debt purchases - or quantitative easing - by the ECB.
Comments
Comments are closed for this article.