Hoping to avert recession, Europe’s central bank took steps to stimulate growth, including purchasing bonds and punishing banks that hoard cash

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The EU doesn’t find itself in this “low-growth” position because there hasn’t been enough stimulus or that interest rates are too high. Continuing to promote negative rates isn’t going to stimulate organic healthy sustainable growth, but instead incentivize wasteful spending/investment that most likely will be dependent on more near-zero financing. More and more of the same ECB medicine isn’t suddenly going to improve the deep and structural problems the EU faces – especially its PIGS and financial institutions. Bailing out and continuing to enable these countries and institutions with NIRPs and asset purchases will do absolutely nothing to address the underlying competitive, labor and cultural problems that persist.

MonsterMeowMeow

I feel like this is making everything worse. Everyone knows a recession is coming and all of these extreme measures are building an atmosphere of fear. Trying all of these unorthodox methods only feeds the idea that this recession is going to be really bad. Plus forcing banks to spend money is going to have them pumping money into projects that are flimsy and offer little chance of return. If banks aren’t spending it is because they don’t think it would be good for them to make investments. Instead of wonky economic policy designed to keep the sugar high going maybe we should focus on softening the recession when it comes and developing policies that will help the average person through the hard times

ndm2701

“Monetary policy” does not work. Only fiscal policy can better the European economy

ClintJBallinger

I’m new into this ..can someone explain what is negative rate with an example ? Thanks

StonedTRex

At this point, central bankers are a joke.

MoonJaeIn