Under the factual central bankers attitude of ECB President Mario Draghi anger was clear. For months doldrums in Europe’s economy, inflation is slower and slower – and again say market analysts and other well-meaning people, the European Central Bank would have done more for the economy. Buy more securities. Distribute more money. The European Central Bank has already done a lot – even more than is good. Now she also buys bonds of dubious quality from Greece and Cyprus. It would already our turn.
Author: Patrick Bernau, born in 1981, senior editor of Economics Online.
The interest rates are near zero. In Europe is so much money floating around that the banks return it partly to central bank, although it now requires penalty interest. Yes, even companies already have to pay to store their money in the bank. The ideas are always unconventional, the side effects more violent – with monetary policy, Europe can not save. The European Central Bank can not alone solve the current crisis, it sows the seeds for most, the next crisis.
The problem is quite different. Europe lacks investments where sometimes take personal and corporate money in hand and build a house, build a new factory or invest in salaries for new staff. In countries such as France or Italy, which therefore does not alone, because the rigidities in the economy there are not yet broken even after five years of euro crisis.
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From Germany, ECB President Draghi calls for a higher public debt – but this would be the wrong way. That says even now the new currency Commissioner Pierre Moscovici from France. The public funds in the euro zone are still in debt to 90 percent of its economic output. Since new debt should in no country added.
Instead, Europe should think about why businesses and people do not even invest voluntarily in strong countries such as Germany. Are they the long-term prospects too weak in a continent in which fewer children are born? Lack of innovative ideas, in which you could invest that money? Or is there a different reason?
Only when these questions are answered, can a sustainable way out of Europe’s crisis can find.
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