So whatever my own intellectual interest in helicopter money, as a Governing Council member I have a fair deal of skepticism and circumspection. So we’re not near the point where the ECB could, for example, decide to finance by itself the big public investment boost it has been calling for? Say, by lending € billion or more to the European Investment Bank (EIB)? The theoretical example you cite underlines the problem I just mentioned of the borderline between monetary and fiscal policy. We are already supporting investment in the euro area through our monetary policy. We have brought down the entire yield curve and we are buying securities of public entities such as the EIB as part of our asset purchase programme. But it is absolutely not our role to decide which investment should go ahead, which bridge should be repaired or which school built, nor whether the investment should be private or public. Ben Bernanke, in his memoirs, suggests that if the United States and Europe took different paths out of the crisis, that is partly because Europe’s monetary policy in the first years was too tight, and its fiscal policy too strict at the wrong moment… I’m not for rewriting history, but the ECB and governments reacted with the tools they had at the time.
I think banks have been reassured about the possible negative impact of negative rates on some of them. They know we will not take rates into absurdly negative territory. But we can never rule out further moves. That would not be credible anyway. Over the last few months the ECB has been suggesting that it has done its part in the euro zone recovery, and has been asking governments to do theirs. At the same time, it insists it could do even more if needed, and that its toolbox is far from empty. Isn’t that partly contradictory? The roles of the ECB and governments are different. Our job is to bring inflation back to its near-2% level. That’s our mandate; you could say that’s our contract. Whenever we have doubts that the goal will be reached, we act. Monetary policy has a short-to-medium-term horizon. We think it is up to governments to act to foster long-term growth. According to the European Commission, potential growth in the euro area is at around 1% today. It was almost twice that in the years before the crisis. And we think that structural and fiscal policy must be used wherever there is scope to do so, in terms of both quantity and quality. But it is not the ECB’s role to go into detail about what governments should do. The founding treaties are explicit and give us different roles. The idea that the central bank should be the gendarme of economic policy among euro area countries simply doesn’t work.