Report
The ECB needs serious fiscal rules and macroprudential policies in the euro zone to keep interest rates low
Even if the ECB moves to a less expansionary monetary policy, it wants to keep interest rates low to prevent a debt crisis, to encourage investment, particularly in the energy transition, and to boost job creation. The first risk, if real interest rates in the euro zone remain negative, is that governments will take advantage of them to keep fiscal deficits very high; the second risk is that asset prices, especially real estate prices, will continue to rise unreasonably. To continue to conduct an expansionary monetary policy that keeps real interest rates negative, the ECB therefore needs: European fiscal rules that limit fiscal deficits, even if they allow debt financing of efficient public investments; Serious macroprudential policies that curb the rise in real estate prices.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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