This is what the ECB is doing with the measures implemented since the middle of last year, in a context of prolonged low inflation. We have cut the official rates down to negative levels, approved a credit easing packages – most notably with the targeted longer-term refinancing operations – and expanded our purchase programme of public and private sector securities.
The Stability and Growth Pact does not exist for its own sake, nor is it the “hobby horse” of some central bankers; rather, it is a requirement for the long-term effectiveness of monetary union. I would like to explain this by emphasising three factors at work here. 1.