Sylvester Eijffinger's picture
Affiliation: 
CentER, Tilburg University
Credentials: 
Professor of Financial Economics
President of Tilburg University Society

Voting history

German Council of Economic Experts' view of ECB policy

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Question 2: Do you agree that the ECB's monetary policy masks structural problems of member states?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
The ECB's Monetary policy masks the structural problems in the Eurozone member states and creates a lack of confidence and trust which is extremely harmful for economic growth in the Eurozone. A very clear example is the structural reform agenda of the Italian prime minister Renzi which has not been implemented since almost two years with reference by Renzi to the Italian low capital market interest rates which make structural reforms in Italy less necessary.

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Question 1: Do you agree that exceptionally loose monetary policy by the European Central Bank is no longer appropriate?

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Answer:
Strongly Agree
Confidence level:
Extremely confident
Comment:
The exceptionally loose monetary policy by the ECB does not stimulate economic growth in the Eurozone and undermines financial stability by distortion of the market prices of government and corporate bonds, in particular in the peripherical countries of the Eurozone. Therefore, the non-performing loans of Italian and other banks will be rolled over and the necessary structural labour market and product market reforms in France, Italy and other eurocountries are not implemented.

German current account surpluses

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Question 2: Do you agree that the German government should increase public spending given its persistently large current account surplus and given that it is part of the Eurozone?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
The German government should increase public spending in terms of investment in the physical infrastructure (e.g. bridges, roads, railways, etc.) and in the human infrastructure (e.g. education, research, etc.). Other surplus countries, like the Netherlands, should also increase investments.

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Question 1: Do you agree that German current account surpluses are a threat to the Eurozone economy?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
The German current account surpluses are indeed a threat to the Eurozone economy but German politicians will only agree with stimuluses when the Eurozone countries with deficits on the current account will pursue structural reforms in labour and product markets. Therefore, the Eurozone countries should improve their coordination of macroeconomic policies with stimuluses by the surplus countries, preferably investments in their infrastructure, and structural reforms by the deficit countries.

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