MUNICH: The temperature in Munich plunged below freezing on Thursday after ECB President Mario Draghi announced a 1.1 trillion-euro ($1.23tr) bond-purchasing programme. Its citizens’ response to the historic move was equally chilly.

“It’s crazy, and really bad news for Germany,” said Bernhard Widmann, a 59-year-old working in finance, as he ambled past the town hall on the city’s Marienplatz. “We always end up having to pay for it. We subsidise the rest of the eurozone.”

Iris Reuter, a coaching and organisation consultant in Hamburg in the north, is just as sceptical. “I see a discrepancy between those enormous fiscal measures on the one hand and what Europe is doing to grow together culturally on the other,” she said. “Whether the ECB money will help the economy, I can’t judge.”

As Draghi embarks on a path to avert a deflationary spiral by spending 60 billion euros a month on bonds and asset-backed securities, ordinary Germans are concerned about the prospect of yet more stimulus that in their eyes comes at Germany’s expense.

The ECB will carry out purchases in proportion to each euro-area country’s contribution to the central bank’s capital. Germany makes up about 25.6 per cent of the so-called capital key, once nations outside the currency bloc are excluded from the calculation. Some of the purchases “will be subject to a regime of risk sharing,” Draghi said on Thursday.

“This is what’s happening now with your money!” Bild- Zeitung, the country’s best-selling daily newspaper, splashed across its front page on Friday. A question on page two, with a picture of the ECB president baring his teeth in a menacing pose, asked “Does Draghi’s trillion make everything more expensive now?”

By arrangement with Washington Post-Bloomberg News Service

Published in Dawn, January 25th, 2015

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