The European Central Bank (ECB) yesterday unveiled plans to restart buying government bonds in a move aimed at cutting high borrowing costs faced by distressed euro-zone nations.
In a sign of the deepening turmoil enveloping the single-currency area, the ECB also trimmed its economic forecasts for this year and next.
"We are in a situation now where you have large parts of the euro area in what we call a bad equilibrium," said Mario Draghi, the bank's president, announcing the plan.
"You may have self-fulfilling expectations that feed on themselves and generate very adverse scenarios. This would justify the intervention of the central bank."
Mr Draghi fleshed out more details of the bond-buying programmethe ECB first mooted last month. Involving the purchase of government bonds in the open market, the scheme will provide a "fully effective backstop" against market volatility.
But he made it clear governments seeking help under the scheme would have to comply with strict rules and conditions first. It means Spain and Italy may have to follow the path of Greece, Portugal and Ireland in seeking formal bailouts before the ECB will act.
The ECB hopes buying sovereign bonds will help to raise their pricing and, as a result, lower their yield. Yields are used as a benchmark by countries to determine the cost they borrow in the market.
Yields for peripheral countries' five and 10-year bonds are still at elevated levels, despite falling in the past month since news of the bond-buying scheme emerged.
European markets edged higher after the announcement, with the Eurofirst 300 up 1.01 per cent at 1,090.17.
The ECB had earlier left its official interest rates unchanged.
Its growth forecast for this year was trimmed to about minus 0.4 per cent, with possible growth next year of up to 1.4 per cent.
Mr Draghi's announcement came on the same day a fresh wave of dire economic data signalled the euro zone was heading towards a deep recession.
The decision to go ahead with buying bonds signals Mr Draghi's victory in the battle to push through the scheme despite opposition from Germany's Bundesbank.
Mr Draghi yesterday said the vote in favour of the programme was not unanimous with one dissenting vote, without giving further details.
The latest measure will succeed the bank's securities markets programme, which has been inactive since March.
The EU's statistics office Eurostat confirmed GDP in the 17 countries using the euro fell 0.2 per cent in the second quarter compared with the previous quarter. The year-on-year fall was revised to 0.5 per cent from its previous estimate of 0.4 per cent.
Meanwhile, the Organisation for Economic Cooperation and Development, based in Paris, also warned the problems were infecting the global economy. The crisis was "dampening global confidence, weakening trade and employment and slowing economic growth," it said.
Other data showed unemployment in Greece, the initial source of euro-zone woes, rose to 24.4 per cent in June, up from 23.5 per cent in May.
tarnold@thenational.ae
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RESULT
Arsenal 0 Chelsea 3
Chelsea: Willian (40'), Batshuayi (42', 49')
Recipe: Spirulina Coconut Brothie
Ingredients
1 tbsp Spirulina powder
1 banana
1 cup unsweetened coconut milk (full fat preferable)
1 tbsp fresh turmeric or turmeric powder
½ cup fresh spinach leaves
½ cup vegan broth
2 crushed ice cubes (optional)
Method
Blend all the ingredients together on high in a high-speed blender until smooth and creamy.
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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COMPANY%20PROFILE
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COMPANY%20PROFILE
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Temple numbers
Expected completion: 2022
Height: 24 meters
Ground floor banquet hall: 370 square metres to accommodate about 750 people
Ground floor multipurpose hall: 92 square metres for up to 200 people
First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time
First floor terrace areas: 2,30 square metres
Temple will be spread over 6,900 square metres
Structure includes two basements, ground and first floor
The Good Liar
Starring: Helen Mirren, Ian McKellen
Directed by: Bill Condon
Three out of five stars
MATHC INFO
England 19 (Try: Tuilagi; Cons: Farrell; Pens: Ford (4)
New Zealand 7 (Try: Savea; Con: Mo'unga)
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
How tumultuous protests grew
- A fuel tax protest by French drivers appealed to wider anti-government sentiment
- Unlike previous French demonstrations there was no trade union or organised movement involved
- Demonstrators responded to online petitions and flooded squares to block traffic
- At its height there were almost 300,000 on the streets in support
- Named after the high visibility jackets that drivers must keep in cars
- Clashes soon turned violent as thousands fought with police at cordons
- An estimated two dozen people lost eyes and many others were admitted to hospital
The specs
Engine: 1.6-litre 4-cyl turbo
Power: 217hp at 5,750rpm
Torque: 300Nm at 1,900rpm
Transmission: eight-speed auto
Price: from Dh130,000
On sale: now
More on Quran memorisation:
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Cargoz%3Cbr%3E%3Cstrong%3EDate%20started%3A%3C%2Fstrong%3E%20January%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Premlal%20Pullisserry%20and%20Lijo%20Antony%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2030%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Seed%3C%2Fp%3E%0A
The specs: 2018 Volkswagen Teramont
Price, base / as tested Dh137,000 / Dh189,950
Engine 3.6-litre V6
Gearbox Eight-speed automatic
Power 280hp @ 6,200rpm
Torque 360Nm @ 2,750rpm
Fuel economy, combined 11.7L / 100km
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh