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Taoiseach optimistic 'QE' will help - but opposition doubtful

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Taoiseach Enda Kenny speaks at the Europe's Twin Challenges: Growth and Stability event in the Swiss mountain resort of Davos January 22, 2015.

Taoiseach Enda Kenny speaks at the Europe's Twin Challenges: Growth and Stability event in the Swiss mountain resort of Davos January 22, 2015.

REUTERS

Taoiseach Enda Kenny speaks at the Europe's Twin Challenges: Growth and Stability event in the Swiss mountain resort of Davos January 22, 2015.

The European Central Bank decision to pump €60bn into the eurozone economy was good for European stability and good for Irish jobs, Taoiseach Enda Kenny has said.

Speaking at the world economic forum in Davos, Switzerland, Mr Kenny said the mandate of the European Central Bank (ECB) was to deliver on price stability - and anything that would do that would be good for Europe.

He also said he would like to think that the ECB would be free from political pressure when reaching its decisions. It is understood that the so-called 'Quantitative Easing' (QE) plan would see the Central Bank of Ireland buy about €16bn worth of Irish government bonds. But officials said the Government saw no implicit financial risk to Ireland.

Across the 19 nations in the eurozone, the QE scheme involves buying €60m worth of private and public sector bonds per month between March 2015 and September 2016. It aims to lower the value of the euro, increase import prices, raise inflation, and help exporters sell more.

The Irish government views the plan as having a number of key benefits. These include a further weakening of the euro - which would be good for Irish exporters - and lowering the cost of financing for the banks.

Earlier yesterday, Mr Kenny told a panel discussion that Ireland's recovery was fragile and incomplete, and that it required three to five years of stable growth and political stability.

"In Ireland - where you have a rise in populism, out of all this confusion, out of all the offers that come from populist parties - the key for the future is discipline, clarity, stability of agenda," the Taoiseach said.

Fianna Fáil leader Micheál Martin said the ECB move was potentially significant, but it must be accompanied by measures to ensure that European economic stimulus was felt by ordinary families. He said the US had done a better job than Europe in dealing with the economic crisis and EU unemployment was twice the US level. But Mr Martin said even in the US it was the better-off people who benefited most.

"There is a strong case to be made for a Europe-wide stimulus plan to help create jobs," he said.

Irish Independent