Europe’s radical monetary experiment

As the eurozone's economy sinks, the European Central Bank is thinking big. That’s worrying, says Matthew Lynn.

Christine Lagarde © FABRICE COFFRINI/AFP/Getty Images

Christine Lagarde is due to take over at the money-printers
(Image credit: Christine Lagarde © FABRICE COFFRINI/AFP/Getty Images)

There are signs that pressure is building for a radical monetary experiment in the eurozone. Over the past four years, the central bank has printed more than €2trn euros, flooded the banking system with money, bought up government bonds and slashed interest rates down below zero in an effort to boost its flagging economy. In 2017 and 2018, all that printed cash briefly fired life into the European economy. But now it is flagging again. Germany is close to an outright recession, growth is tepid in France, and Italy is no closer to a sustained recovery than it has been since it joined the euro 20 years ago. This is the problem facing Christine Lagarde when she takes over next month as president of the European Central Bank (ECB). It seems certain she will have to do more. But what?

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.