Late to the party, perhaps, but today sees the start of the Eurozone’s open ended quantitative easing programme (QE). It is anticipated that the ECB will pump at least €1.1trillion of new money into asset purchases over the next 18 months as it seeks to apply CPR to the quivering heart of the Eurozone economy.

The move was announced on 22/01/15 by ECB President, Mario Draghi and was set to commence in March. The medicine will be given to the patient at a rate of €60 billion per month and is slated to continue until September of next year – at the earliest.

The ECB QE programme has several goals one of which is to reverse deflation within the 19 member Eurozone bloc. It is anticipated that the move will bolster confidence about the fortunes of the bloc and it should move the Euro lower. However, the Euro has slipped from 1.2010 to the Dollar to stand at 1.1195 currently, since the start of the year and has dipped from € 1.2789 to €1.3788 to the Pound over the same period (and from a pegged value of €1 = CHF 1.20 to stand at €1.065 currently after the peg was officially ended) – falls of 7.3, 7.2 and 12.7% respectively. The declining value of the Euro ought to make Eurozone exports more competitive in importing markets. Time will tell if the market has already priced QE into the value of the single currency.

Some of the new funds can be used to purchase private (i.e. non-sovereign) equities in a bid to unlock credit markets thereby improvising liquidity for loans to businesses. Only 20% of the funding will involve “risk sharing” with the lion’s share of the risk being taken by individual Eurozone central banks.

Mr Draghi was at pains to say that QE could improve the situation in Europe, but structural reforms were still needed to put the blocs recovery on a sustainable footing.