ECB to inject billions of euros into ailing eurozone economy

THE European Central Bank (ECB) has announced it will inject billions of euros into the ailing eurozone economy.

The ECB will purchase government bonds worth €60bn per month until the end of September 2016 – far more than previously expected.

The ECB also said eurozone interest rates were being held at the record low of 0.05%, where they have been since September 2014.

Earlier, German Chancellor Angela Merkel said Thursday that any action by the European Central Bank should not ease the pressure on European politicians to enact reforms to bolster the economy.

“No matter what sort of decision the ECB will take, we should not become diverted from the fact that we as politicians need to put a framework for recovery in place,” Merkel told the World Economic Forum in Davos, minutes ahead of a likely decision by the ECB to introduce a controversial bond-buying programme.

“Europe continues to be confronted by great challenges. We have often talked about the crisis … we have this somewhat under control but we are not out of the woods yet,” added the chancellor, a regular Davos visitor.

Earlier on Thursday, the ECB held its key interest rates unchanged on Thursday at its first policy meeting of 2015, but said it would announce new monetary policy measures later in the day.

Global investors are anxiously waiting for ECB chief Mario Draghi to unveil the details of a massive bond-buying programme which the ECB is drawing up to stimulate the struggling eurozone economy.

However, the German central bank, or Bundesbank, has voiced opposition to the scheme, believing it might give some countries less incentive to reform.