ECB to maintain a hard line on Greece

The ECB is unlikely to announce any new policies after its meeting next week as it prepares to implement the quantitative easing programme unveiled in January. President Draghi will claim that QE is already having a positive impact, even before the bulk of purchases has begun. But we suspect that its overall effect will be modest given the already low level of bond yields and the scheme’s limited size. Meanwhile, the Bank will continue to take a hard line on Greece, dealing a blow to hopes that it might help the country to meet its financing needs in the near term.