The link between monetary policy and fiscal policy in the euro zone: One view based of flows, another one based on stocks

It is often argued that in the euro zone, it would be efficient to switch to a more expansionary fiscal policy that would make it possible to make monetary policy less expansionary and avoid the serious drawbacks of zero or negative interest rates. This reasoning is correct if we look only at "flows": the euro zone’s fiscal deficit is low and increasing it would reduce the pressure on the ECB to stimulate demand. But we can have a different view if we consider "stocks": a more expansionary fiscal policy would increase the public debt ratio, and an even more expansionary monetary policy would be needed to ensure fiscal solvency. In terms of flows, a more expansionary fiscal policy therefore makes it possible to have a less expansionary monetary policy; in terms of stocks, a more expansionary fiscal policy therefore on the contrary requires having a more expansionary monetary policy.