The European Central Bank (ECB) cut rates on Thursday to a record low and said it would follow the Bank of England in launching a process of “quantitative easing” in a desperate bid to pull the eurozone’s stricken economy out of recession.
The bank shaved a quarter point (25 basis points) off its main interest rate, taking it to 1 percent. This is the seventh time it has reduced rates since October, when they stood at 4.25 percent.
It also announced that it would pump 60 billion euros (US$80.4 billion) into the 16-nation economy through buying “covered” bonds. These are primarily corporate bonds, but holders have access to assets that secure or “cover” the bond if the company that issues them becomes insolvent.
ECB policymakers have spent months arguing about whether to follow Britain and the US in battling the global downturn through purchasing assets. The Bank of England, though, has concentrated on buying government, rather than corporate, bonds. The Frankfurt-based ECB also said it would extend the period under which it lends banks unlimited funds from six months to a year.
Howard Archer, chief European and UK economist at IHS Global Insight, said: “The fact that the ECB felt compelled to take this wide-ranging action highlights the fact that the eurozone economy remains in serious trouble, despite some recent signs that the rate of economic decline is moderating.
“We suspect that the actual recovery still remains some way away and relapses are a very serious risk. Consequently, we expect the ECB to keep interest rates down at 1 percent until well into 2010.”
RESPONSE: The transit sends a message that China’s alignment with other countries would not deter the West from defending freedom of navigation, an academic said Canadian frigate the Ville de Quebec and Australian guided-missile destroyer the Brisbane transited the Taiwan Strait yesterday morning, the first time the two nations have conducted a joint freedom of navigation operation. The Canadian and Australian militaries did not immediately respond to requests for comment. The Ministry of National Defense declined to confirm the passage, saying only that Taiwan’s armed forces had deployed surveillance and reconnaissance assets, along with warships and combat aircraft, to safeguard security across the Strait. The two vessels were observed transiting northward along the eastern side of the Taiwan Strait’s median line, with Japan being their most likely destination,
‘NOT ALONE’: A Taiwan Strait war would disrupt global trade routes, and could spark a worldwide crisis, so a powerful US presence is needed as a deterrence, a US senator said US Senator Deb Fischer on Thursday urged her colleagues in the US Congress to deepen Washington’s cooperation with Taiwan and other Indo-Pacific partners to contain the global security threat from China. Fischer and other lawmakers recently returned from an official trip to the Indo-Pacific region, where they toured US military bases in Hawaii and Guam, and visited leaders, including President William Lai (賴清德). The trip underscored the reality that the world is undergoing turmoil, and maintaining a free and open Indo-Pacific region is crucial to the security interests of the US and its partners, she said. Her visit to Taiwan demonstrated ways the
GLOBAL ISSUE: If China annexes Taiwan, ‘it will not stop its expansion there, as it only becomes stronger and has more force to expand further,’ the president said China’s military and diplomatic expansion is not a sole issue for Taiwan, but one that risks world peace, President William Lai (賴清德) said yesterday, adding that Taiwan would stand with the alliance of democratic countries to preserve peace through deterrence. Lai made the remark in an exclusive interview with the Chinese-language Liberty Times (sister paper of the Taipei Times). “China is strategically pushing forward to change the international order,” Lai said, adding that China established the Asia Infrastructure Investment Bank, launched the Belt and Road Initiative, and pushed for yuan internationalization, because it wants to replace the democratic rules-based international
RELEASED: Ko emerged from a courthouse before about 700 supporters, describing his year in custody as a period of ‘suffering’ and vowed to ‘not surrender’ Former Taiwan People’s Party (TPP) chairman Ko Wen-je (柯文哲) was released on NT$70 million (US$2.29 million) bail yesterday, bringing an end to his year-long incommunicado detention as he awaits trial on corruption charges. Under the conditions set by the Taipei District Court on Friday, Ko must remain at a registered address, wear a GPS-enabled ankle monitor and is prohibited from leaving the country. He is also barred from contacting codefendants or witnesses. After Ko’s wife, Peggy Chen (陳佩琪), posted bail, Ko was transported from the Taipei Detention Center to the Taipei District Court at 12:20pm, where he was fitted with the tracking
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