Just what Europe’s economies need, lower saving and higher inflation:
Mario Draghi: “Together, the measures will contribute to a return of inflation rates to levels closer to 2%”
The European Central Bank has introduced a raft of measures aimed at stimulating the eurozone economy, including negative interest rates and cheap long-term loans to banks.
It cut its deposit rate for banks from zero to -0.1%, to encourage banks to lend to businesses rather than hold on to money.
The ECB also cut its benchmark interest rate to 0.15% from 0.25%.
The ECB is the first major central bank to introduce negative interest rates.
If one set of Keynesian policies don’t seem to work there are then others they have that will fail just as well. And if -0.1% doesn’t work they can lower the number even more. And the thing is, they are clueless about why none of this will work.