The reasons for this are the aforementioned major global trends, notably the demographic developments and the so-called “savings glut”. Low real interest rates are neither solely the result of the ECB’s policy nor are they unusual from a historical perspective. As I have already indicated, the low real interest rates are partly the result of shifts in global savings and investments, i.e.
developments beyond the control of the ECB. And there have also been prolonged episodes of negative real interest rates in the past: in Germany, for example, the real returns on savings between 1974 and 1981 and between 1989 and 1994 were almost always negative. Many people were unaware of this because the nominal interest rates were higher – but inflation was even higher.