750 billion+600 billion
When the epidemic struck, many European countries aimed to issue bonds, even without restrictions. If this goes on, there will always be times when we can't get around it. It is against this background that on Thursday night, Beijing time, the European Central Bank officially announced that it would keep interest rates unchanged, but expanded the scale of the emergency purchase plan, which was higher than previous analysts' expectations.
The European Central Bank announced that the interest rate of major refinancing business will remain at 0, the interest rate of marginal loan arrangement will remain at 0.25%, and the interest rate of deposit arrangement will remain unchanged at -0.5%. As for the scale of the emergency purchase plan, it has increased by 600 billion euros, reaching a total of 654.38+35 million euros. At the same time, the net purchase period under the emergency purchase plan will be extended to at least the end of June of 202 1.
The scale of 600 billion euros did exceed market expectations. On the 3rd local time, Florian Hense, an economist at Berenberg Bank, wrote in an analyst's report: "We believe that there is a 60% chance that the European Central Bank will raise its asset purchase target on June 4th, which may increase the stimulus plan by 500 billion euros. Pessimistic expectations of economic growth and (Hong Kong stocks 000 1) inflation make it easy for them to make such a decision. "
In mid-March this year, in response to the impact of the COVID-19 epidemic, the European Central Bank announced the launch of an emergency purchase plan of 750 billion euros, including the purchase of assets from the private sector and the public sector, covering all eligible asset categories under the existing asset purchase plan. It is expected that this plan will last until the end of 2020.
At that time, European Central Bank President Lagarde mentioned that special actions were needed in special times, and the ECB's commitment to Europe was unlimited. In addition, they are fully prepared to increase the scale of asset purchases when necessary.
Finance or money?
To understand the ECB's forecast, we may have to start with the European Commission. On May 27th, local time, the European Commission finally passed the Anti-epidemic Rehabilitation Act "Rehabilitation Fund Plan", with the same scale of 750 billion euros, of which 500 billion euros will be distributed to EU member States in the form of free aid, and the remaining 250 billion euros will be used for borrowing. The Italian government is expected to receive 82 billion euros in emergency aid and low-interest loans as high as 9 1 billion euros, making it the biggest beneficiary of this stimulus plan.
"Europe faces a critical moment. We must either fight independently and accept a divided Europe, or go hand in hand to open up new paths for ourselves and the next generation. " At that time, Ursula Ursula von der Leyen, President of the European Commission, put it this way. What she said might be the "joint bond issue" that EU member States had quarreled about. Behind the joint bond issuance is the strong opposition between the North and South countries in Europe. Richer northern countries are unwilling to bear the economic responsibility brought by joint bond issuance, while poorer southern countries want to jointly issue bonds to pass on risks, which leads to contradictions.
"As long as I live, there will be no Eurobonds." Eight years ago, in the face of the euro crisis, German Chancellor Angela Merkel released such malicious words. In her eyes, it is totally unacceptable for * * * to share the debtor's responsibility. At that time, Eurobonds were no different from joint bond issuance now. Therefore, it can also be seen that of the 750 billion euros used for lending, 250 billion euros is obviously to appease the budget hardliners in the EU who oppose joint bond issuance.
Hu Dawei, a researcher at the China Institute of International Studies, said that in fact, many EU countries are reluctant to issue bonds collectively, because some countries with weak economies know that once they issue bonds, they can't repay them, so the interest rate is extremely high, and issuing bonds together may lead to "raw skin" among EU member States. Therefore, in this crisis, only the European Central Bank can come forward, adopt some quantitative easing policies, buy bonds in the market, and make up for the deficiency of fiscal policy through monetary policy. Hu Dawei said that at present, European countries are mainly concerned about the relief after the epidemic has slowed down, and look forward to whether the economy can be restarted as soon as possible. If the epidemic is repeated, we can only rely on the unconventional monetary policy of the central bank to deal with the immediate crisis, but this risk is likely to turn into hyperinflation. Once this happens, all the wealth will go up in smoke.
Cui Hongjian, director of the European Institute of China Institute of International Studies, also said that on the one hand, the EU has been entangled in whether there will be different treatment between the euro zone and the non-euro zone, on the other hand, it is the issue of investors, guarantors and beneficiaries. The previous contradiction between North and South focused on this point. In fact, during the euro zone debt crisis, there were different voices about * * * and issuing bonds within the EU. There is no agreement on whether to let the European Central Bank cover the whole story. This issue has not been made clear up to now, so a disguised ESM rescue fund has emerged, but this way also means that the European Central Bank has actually broken through its original position of being relatively neutral as a monetary policy maker and a euro manager.
Cui Hongjian said that the situation during the euro zone debt crisis was different from now. At present, how much role the ECB can play and to what extent it can intervene is a problem, which may even lead to moral hazard. After all, the actual value of the euro is not the same in different countries. This is the problem that Eurobonds have to solve, that is, financing from the market in the name of the European Union and redistributing internal responsibilities. Of course, the plan of European bonds should also be linked to the reform of member countries, which is actually a "reassuring" for those rich countries that are unwilling to take risks.
Difficult economic problems
In terms of debt, the euro zone countries are indeed a bit dangerous. At the end of last month, the European Central Bank predicted in its semi-annual financial stability assessment that the ratio of budget deficit to GDP of governments in the euro zone will rise to 8% on average this year, much higher than the level after the 2008 financial crisis. According to the data of the European Central Bank, as the member countries begin to deal with the economic impact of the COVID-19 crisis, the ratio of total government debt to GDP of these 65,438+09 countries will rise from 86% to over 65,438+000%.
The economies of the euro zone countries have also turned red. According to the data released by Eurostat (Eurostat month 15), the GDP of the euro zone fell by 3.8% in the first quarter, the largest decline since records began in May 1995. Among them, the GDP of Germany, France and Italy decreased by 2.2%, 5.8% and 4.7% respectively.
For all Member States, economic recovery has become a top priority. The German government made a decision after a cabinet meeting on the 3rd, and will cancel the travel warning to other EU member states except Spain from June 15. On the same day, the German government also finalized an economic stimulus plan totaling 654.38+030 billion euros. At the end of last month, French President Macron also introduced a series of subsidy measures for the French automobile industry, thus adding another 8 billion euros to the government's stimulus plan this year. Belgian Prime Minister Wilmes said at a press conference on the 3 rd that the third phase of "lifting the ban" in Belgium will be launched as scheduled.
Cui Hongjian said that at present, the EU has launched two purchase plans, namely, an asset purchase plan of 654.38+02 billion euros and a debt purchase plan of 750 billion euros, but for member States, they have not received the corresponding real money. From this perspective, the EU has released more policy support, so there will be a 750 billion euro recovery fund plan that has not been fully agreed. However, the current situation is that what really reflects the financial input is the real money that countries have taken out by themselves. As for the future, it should also include 500 billion euros in the revival fund plan.
Despite the great impact of the epidemic, many European countries are actually burdened with certain problems. Hu Dawei said that under the influence of the epidemic, the economic decline of European countries is certain, but the biggest problem of European economy for a long time is the lack of growth. On the one hand, the debt is too high, on the other hand, the welfare is too good, which leads to the lack of vitality in the economy. Enterprises are burdened with huge welfare expenses, so the cost will never come down, which is why European enterprises have always hated globalization for so many years. Since the European debt crisis, the European economy has not improved, the economic growth is very slow, and the debt is increasing day by day, so we can only take it one step at a time.
"In view of the status of the reserve currency, the US dollar still has room for manoeuvre, and there are also some mechanisms to transfer costs. However, there are many systems in the internal system design of the euro zone that are not conducive to foreign investors, and they are unwilling to take them away. Therefore, the capital market is always less attractive than the dollar, and there are no far-sighted politicians in the system. Everyone is mediocre and they are pulling each other. " David concluded.