The point of Draghi’s QE is not the amount. It is the principle.

It is not the much discussed size of the ECB operation. Rather, it is the fact that the ECB has become a buyer of government bonds issued in the countries that are members of the Eurozone.

This is the really big news in the Eurozone where, until last week, the ECB’s monetary operations did not include the possibility of trading in the government securities market in the same way the Fed, the Bank of England, or the Bank of Japan do.

With QE, the ECB has become an actor in the government securities market and, as happens in the U.S,, the U.K., or Japan, this provides continuous liquidity to the bonds being traded, removing default risk.

The ECB could have achieved this same goal without QE, simply by announcing that it would enter the government securities market in its monetary policy operations. Technical and political circumstances were such that Draghi achieved this same result through an operation called an expanded asset purchase programme. While Draghi sold this program as being inflationary (meaning, it will help restore a below-but-close-to 2% inflation rate), in fact it is not (the ECB will spend 60 bn euros each month to buy 60 bn euros of private and government securities), and yet what really matters and what makes Draghi’s QE announcement historical is the fact that the ECB has become an actor in the government securities market of the Eurozone.

Because Draghi’s QE removes default risk from government debt, deposit insurance (now funded at the national level) becomes more credible, and TARGET2 imbalances will get smaller.

QE will not last forever. But the new attribute of the ECB as a dealer in government bonds is here to stay.