Such operations of course also augment the demand for public debt, thereby reducing the interest rate on the debt and making it easier for governments to finance themselves. But this effect is entirely incidental to monetary policy. 5. Reducing public debts  Public debts are currently very large in many countries and must be reduced.
The European Union has adopted a number of measures that restrict governments’ ability to run deficits and require many of them to reduce public debt. But how will these debts be reduced? What mechanism should be relied on? As a preliminary, it is useful to recall that there are many historical examples of episodes in which public debts have risen to very high levels.