ECB’s QE may have a positive effect on Cyprus, economists say

By Stelios Orphanides

The European Central Bank’s expanded asset purchasing programme announced today by its chairman Mario Draghi may help fight deflation and invigorate growth, at least to some extent, economists said.

Alexander Michaelides, who heads the finance department at the Imperial College in London, said the ECB’s 1.1 trillion euros asset purchase programme, also known as quantitative easing, will help the euro area avoid deflation while it may at least indirectly help the Cypriot economy via a weak euro.

The euro “should not have been so strong” given the euro area’s growth prospects, Michalides said adding that a weaker euro could help the economies of countries like Cyprus exposed to third-country services income, such as tourism from the United Kingdom.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.