S&D Euro MPs today welcomed the European Central Bank's decision to launch a programme of quantitative easing (QE), including purchases of government bonds as "a move in the right direction."

However the MEPs deplored the decision that a large majority of government bonds purchased under this 'expanded asset purchase programme' would be held by respective countries' national central banks and not the ECB.

S&D Group vice-president responsible for economic and monetary affairs Maria João Rodrigues MEP stated:

"The European Central Bank (ECB) has responded to the expectations of companies, financial markets and most European leaders.

"Growth is sluggish and the eurozone is suffering from extremely low inflation. The ECB's target of 2% is therefore clearly not met. Since interest rates can hardly be lowered any further, it is right for the ECB to commit to quantitative easing at least until September 2016 and until inflation adjusts to a path consistent with the 2% inflation target.

"Banks should now lend more to the real economy, leading to growth and job creation. Higher inflation is crucial to reduce the weight of past debts in Europe and to encourage new investment.

"However, it is a pity that only 20% of the additional asset purchases will be subject to risk sharing at the level of the ECB and the rest will be left to national central banks. This sends a bad signal about Europe's monetary union, which is supposed to be irreversible. EU member states have committed to sharing the euro in good times and bad. It should be in everyone's interest to decisively fight the economic crisis in the eurozone, rather than renewing the fragmentation which has held Europe back for so many years.

"The ECB has bent to pressure from the German government and the Bundesbank, who keep repeating the same mistakes over and again. Instead of decisively acting to keep the eurozone together, they prefer to use the financial markets to impose conservative reforms on weaker countries. This approach has made borrowing for SMEs and job creation in many eurozone countries very difficult, and is negatively impacting on the core countries too.

"The quantitative easing programme should be implemented directly by the ECB. As Mr Draghi said, losses under this programme are hypothetical. The central bank cannot be bankrupted as long as we take monetary union seriously. There would be therefore no risk to German or other taxpayers."

S&D Group spokesperson on economic and monetary affairs Elisa Ferreira added:

"Today's action by the ECB is much needed, but it won't be enough to put Europe on a sustainable path towards growth. We need to make full use of the flexibility in our budgetary rules and we need to swiftly implement a strong European investment programme, which crucially depends on national contributions to the proposed Fund for Strategic Investments. Finally, we need to improve the co-ordination of economic policies, so that countries with large surpluses also play their part in supporting demand and creating confidence in balanced economic growth across Europe."