The ECB in 2020: A different philosophy?

The ECB’s new management in 2020 could place greater weight than the current management on the drawbacks of zero interest rates: The weakening of euro-zone banks; The decline in productivity gains due to zombie firms; Real estate price bubbles; The irreversibility of zero interest rates due to the accumulation of debt at very low interest rates; Capital outflows; The inability to use monetary policy in the event of a recession. The drawbacks of zero interest rates are numerous and serious, which could push the ECB’s new management to cautiously exit the zero interest rate policy. Such an exit c ould only take place cautiously because of the high level of debt ratios.