Saturday 16 May 2015 10:31 am

ECB Executive Board Member Yves Mersch says QE stimulus won't end early

European Central Bank executive board member Yves Mersch has said it won't be ending its government bond buying programme prematurely, echoing comments made by boss Mario Draghi earlier this week.

Mersch further dampened speculation the central bank's €1.1 trillion stimulus package would end early, saying this would cast doubts on its growth forecasts for the euro area.

"We have based all our previsions on a projection where we see that growth is picking up, that inflation is getting closer to the inflation target, and that would be the case if we bought 60 billion every month," he said.

"If we stopped now, we would call into question our whole projection. We are currently on a trajectory, we believe in that trajectory, that trajectory so far seems to confirm to us that we are right. And therefore there is no reason to say: No, we are now calling into question everything again."

It comes after Draghi acknowledged printing money has downsides such as exacerbating inequality however failing to act could be even more dangerous. He also promised to carry on with ultra-low interest rates and quantitative easing “as long as needed for its objective to be fully achieved on a truly sustained basis”.

The ECB has pledged to buy €60bn worth of government debt per month until September 2016 to ward off deflation and kickstart growth. It's driving down interest rates and the euro as well as making exports more competitive internationally.

Earlier this week official data showed the Eurozone economy grew faster than the UK's in the first quarter of this year – topping off a recent stream of brighter economic data.

Nonetheless it's still suffering amid persistently high unemployment, high government and corporate debt burdens, as well as weak investment spending.