1. 12/8/11 A new era but no QE, says leading French fund manager - Citywire
A new era but no QE, sa s leading French fund
manager
by Atholl Simpson on Dec 08, 2011 at 15:00
European equity manager Matthieu Rolin of Prigest believes we have entered a new pro-growth era for Europe
under Mario Draghi but he dismissed talk of quantitative easing in the eurozone.
Reacting to news Draghi, president of the ECB, had cut interest rates to 1% the Paris-based manager, who works
alongside renowned veteran investor Christian Cambier, told Citywire Global the announcement was a clear
signal of intent.
It is the second consecutive interest rate cut Draghi has announced since taking office and shows a real rupture
with the Trichet era,' said Rolin, who runs the Prigest Europe fund . His predecessor s firmness was pretty
extreme and this is a way for Draghi to make his mark on his tenure.
The eurozone already has one foot in recession and Draghi has taken this decision because he knows the
economy needs it. He is a lot more pragmatic and less dogmatic than Trichet.
Rolin also believes the announcement is a way to compensate for the fact the ECB does not want to go into a
Fed-style quantitative easing phase.
The main difference between Europe and the US is that we still have interest rates as a weapon. Draghi still has
tools at his disposal. He wants to go with growth.
The one thing Trichet had in his head was inflation. Draghi is more pragmatic and so will make more
announcements that are pro-economy, pro-business and pro-growth.
We now have a central bank that is a lot more flexible and that has understood the principles of defending
growth.'
One of the main reasons he does not believe a QEZ - 'quantitative easing eurozone' - is on the cards is because of
the German refusal to back the plan. But he does still think it could be a possibility.
I would not be surprised if they did start QE at a later date but the Germans are very reticent about the idea as
they fear inflation. I believe that if the politicians don t take action then at some point we will have to come to it.'
But what we also have to realise is behind the inflation argument also lurks the risk of deflation. There also could
be the fear of falling into a deflationary phase and ending up in a situation like Japan.
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