The decision on the PSPP, the Eurosystem’s large-scale purchases of sovereign debt, has been met with similar approval as well. Nevertheless, some in the euro area have also been sceptical of sovereign bond purchases. As you may have heard, I would count myself as one of them. Are the sceptics exaggerating the risks involved?
Are they perhaps victims of what Freud has called the “narcissism of small differences”, seeing differences for the sake of being different? Or are the differences indeed substantial with regard to our capability to fulfil our primary target: to maintain price stability? I would argue that yes, they are substantial.