Germany a hawk? 'The camps will shift'

The European Central Bank's (ECB) policy is increasingly centred on monetary financing in an attempt to protect weak eurozone countries. In an interview with the “Financieele Dagblad” Casper de Vries, professor of monetary economics at the Erasmus University and holder of the H.J. Witteveen Chair, expresses his concerns on this policy.

Germany might no longer support the Netherlands in opposing the monetary financing, since the Netherlands is the only euro country that has saved substantially for the pensions, Germany did not, according to Casper de Vries. De Vries is concerned about the Transmission Protection Instrument (TPI), intended to reduce rising differences in interest rates within the eurozone. The purchase of government bonds by the ECB brings uncertainty as there is no way of knowing exactly how and when central bank interest rate decisions will be transmitted to market interest rates. If you are interested in the entire article, please feel free to read more via this link.

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Article written by Marijn Jongsma.

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