The European Central Bank has begun buying euro-area government bonds as as part of its quantitative easing programme.

Quantitative easing will inject up to €60bn per month in new credit into the Eurozone economy over the next 18 months.

Here in Ireland the Central Bank will start buying up to €500m a month in government bonds.

The programme should continue to maintain or reduce the cost of the government’s debt, and perhaps loosen the shackles on government spending, particularly in an election year.

If successful, the programme will keep the euro competitive against both sterling and the dollar, which would have a knock-on effect on Irish exports, of which more than 50 per cent leave the Eurozone.

ECB President Mario Draghi said last week that the stimulus would spur the euro-area's fastest economic growth in seven years and help reach inflation targets. He predicts economic growth will reach 2.1 per cent by 2017.

The scheme is similar to previous attempts at economic stability by the US Federal Reserve and the Bank of England.