Euro zone: The "left-wing criticism" of monetary policy should be rejected

"Left-wing" economists have be e n criticising the monetary policy conducted in the euro zone since the crisis in many ways. It is claimed that money creation has saved the banks (since they have been given money), but has not helped other economic agents. In reality, the liquidity injections have actually eliminated the liquidity risk for the banks, but their main effect has been to improve the situation of governments, households and companies by reducing the interest paid on their debt . In addition , the low interest rates have reduced the banks' profitability. It is also claimed that "helicopter money" (money creation ex nihilo) would have been far more effective than the monetary policy that has been conducted in the euro zone. But in reality, this has been equivalent to helicopter money: governments have been able to carry out public spending financed by bond issuance, and the bonds issued have almost immediately been bought by the ECB against money creation: it is as if the public spending (for example government transfer payments to households) was carried out in the form of distribution of money. Allegedly, contrary to the lessons of modern monetary theory , governments have not monetised their fiscal deficits to be able to conduct a more expansionary fiscal policy. But the ECB has bought a massive quantity of public debt, thanks to quantitative easing, which has made it possible to increase the public debt (except in Germany) without any impact on long-term interest rates, and therefore to use expansionary fiscal policy more intensely.