The ECB has never been able to make up for its delay

The ECB conducted a restrictive or not very expansionary monetary policy from 2008 to 2013 , at a time when the euro-zone economy was very weak. Then, monetary policy became very expansionary from 2014-2015, at a time when the euro zone’s economic situation improved markedly. I t was above all in 2017 and 2018, when monetary policy should normally have been normalised, at least partially: while quantitative easing has been stopped, interest rates have remained zero. In 2019, at a time when signs of weakening of growth are appearing and while it is likely that 2020 will be quite a bad year, the ECB has practically no leeway to make its monetary policy more expansionary. In reality, the ECB has never made up for the delay incurred from 2008 to 2011: since this period, the euro zone’s monetary policy has remained lagged by several years compared with the economy’s needs, and the consequence is the virtually non-existent countercyclical room for manoeuvre for monetary policy currently. Why this initial delay? Probably because of the ECB’s reaction to inflation caused by the sharp rise in the oil price in 2007-2008, and then in 2010-2011 .