The return of zero or negative long-term interest rates: A major failure for the ECB

After five years of highly expansionary monetary policy in the euro zone, the German 10-year interest rate became zero or negative in the spring of 2019. This shows that five years of highly expansionary monetary policy have failed to: Lift the euro zone’s potential growth; Lift expected inflation in the euro zone; Prevent the current cyclical downturn in the euro zone. All this shows the relat ive ineffectiveness of highly expansionary monetary policies. Moreover , the re t urn of zero long-term interest rates is going to weaken banks and further endanger future growth in the euro zone.