Europe Should Do the Opposite of What It’s Been Doing
Instead of QE and austerity, Europe should tighten monetary policy, easy fiscally
by David Marsh
Market Watch
Mario Draghi and Wolfgang Schäuble need to seal a monetary and fiscal compact to guide Europe out of crisis.
Beset by immigration upheavals and enhanced support for unorthodox populist parties, euro members are relying on loose monetary and tight fiscal policy to generate recovery, cut unemployment and restore faith in European integration.
Rather than persist with an approach that risks failure, European Central Bank President Draghi and German Finance Minister Schäuble — the continent’s two most senior economic policy makers — should engineer tighter eurozone monetary policy and simultaneously loosen fiscally. Reining back controversial plans for more ECB government bond asset purchases (quantitative easing) could be balanced by more pragmatic interpretation of euro bloc budgetary objectives, recognizing that many southern states are already struggling to meet fiscal goals.
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Source: http://financialsurvivalnetwork.com/2016/02/europe-should-do-the-opposite-of-what-its-been-doing/?utm_source=rss&utm_medium=rss&utm_campaign=europe-should-do-the-opposite-of-what-its-been-doing
