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ECB Stimulus Is Finally Reaching the Whole Euro Zone

Page created: Wednesday, 20 September 2017 9:10 GMT

Thematic
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ECB  ECB Stimulus  Euro Zone  Interest Rates

Here’s a sign the euro-area economy is on stronger footing. According to economist Benn Steil, it’s the simple fact that monetary policy is actually working again.

Back in 2013, when the region was reeling from recent debt crises, the European Central Bank’s monetary policy wasn’t being reflected in lending rates in the region’s south. Greece and Portugal were both about to see serious bouts of deflation, but the transmission of ECB interest rates – at the lowest level in the institution’s history to that point – to business loans in those countries had been virtually severed.