The € billion Next Generation EU fund, with its focus on green and digital spending, is a good tool for ensuring that investment flows where it is needed over the next few years. But this will ultimately need to be matched by higher investment elsewhere – not only by the private sector, but also by national governments.
But it faced the challenge that interest rates were already at low levels, limiting the room available for further cuts of its policy rates – the ECB deposit facility had already been brought down to zero in July 2012. But why were interest rates across the whole spectrum of maturities so low in the first place?