ECB Starts QE Funding Amid Greek Warning

The European Central Bank is to start buying government debt as part of its stimulus package within the week.

ECB president Mario Draghi said its new €1.1tn (£796bn) quantitative easing programme would commence purchases on March 9.

This follows on from a 22 January announcement of the plan to stem downward pressure on the 19-nation eurozone economy.

Mr Draghi said: "We have already seen a significant number of positive effects from these monetary policy decisions."

He also revealed upwardly revised annual real GDP projections of 1.5% for 2015, 1.9% for 2016 and 2.1% for 2017.

Inflation, he said, would be higher next year at 1.5% and 1.8% in 2018.

The announcements saw a rapid sell-off of the euro against the dollar, which was already hovering around 11-year lows.

Within minutes of the announcement the euro was trading down 0.62%, with the euro against the pound also down, around 0.55%.

The ECB said it would buy bonds from seven entities, including the Council of Europe Development Bank and the European Financial Stability Facility.

Meanwhile, the ECB also warned Greece that it cannot rely on it to help with short-term debt.

Mr Draghi explained that ECB rules prohibited direct or indirect financing of governments.

"The ECB is a rule-based institution. It is not a political institution."

Options are running out for Athens to fund itself, despite striking a deal with the eurozone in February to extend its bailout by four months.

It is faced with a fall in revenues and now expected to run out of cash by the end of March.

Some analysts believe funds may be exhausted before then.

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