Overt monetary finance or cash distributions to households are therefore likely to have a demand‐stimulating effect just when it is needed.49 However, “helicopter money” type of policy is forbidden by the Treaty on the Functioning of the European Union which clearly prohibits direct financing of fiscal policy that is a competence of governments in the euro area.
A second element of our defense is being careful about foreign borrowing, especially at the very short term. So we have expanded limits for foreign portfolio investment into government debt in a very measured way, even though considerable pressure has been put on us by foreign investors to create more room.