The lasting success of the euro cannot be achieved solely through monetary policy. The success relies as well on the support of the fiscal, labour and structural policies of member states. However, coordination should not be understood as a substitute for the responsibility of policymakers at the national level. The decentralised approach offers scope for healthy policy competition. “Best practice” should prevail.
Where local bond financing consists mostly of domestic banks, the buying of government securities will tend to crowd out finance for a large number of private businesses and/or for much-needed infrastructure projects.