ECB Announces Last-Ditch Effort to Revive Europe’s Economy

The European Central Bank has decided to take one last crack at getting Europe’s economy back on track, announcing a multi-pronged program to boost both inflation and demand. “This has all the hallmarks of the ECB having thrown the kitchen sink at the problem,” said Aberdeen Asset Management Investment Manager Patrick O’Donnell. The Wall Street Journal has the details:

The ECB announced six steps….It cut the level it charges on excess deposits by 0.1 percentage point to minus 0.4%. This means that banks have to pay even more now to leave excess funds with the central bank overnight. It also cut its main interest rate, the rate it charges on regular bank loans, to an all-time low of zero percent from 0.05% where it was previously.

The ECB said Thursday that it would up the monthly volume of its bond buying program to €80 billion ($87 billion), from €60 billion previously.

It also decided to add investment-grade euro-denominated bonds issued by nonbank firms established in the euro area to the list of eligible assets that it can buy….The ECB also decided to extend its program of targeted loans to banks, designed to encourage banks to lend to the real economy….The ECB also cut its interest rate on its overnight lending facility by 0.05 percentage point to 0.25%.

There’s probably less here than meets the eye, but the ECB just didn’t have that many arrows left in its monetary quiver. Still, they had to do something. Their own economists had lowered their growth forecast for 2016 to 1.4 percent and lowered their inflation forecast to 0.1 percent. I can’t say that I’m optimistic that the ECB’s kitchen sink is big enough to do the job on its own, and Europe’s large countries continue to be unwilling to spend their way out of their slump. It’s going to be a long slog.


The more we thought about how MoJo's journalism can have the most impact heading into the 2020 election, the more we realized that so many of today's stories come down to corruption: democracy and the rule of law being undermined by the wealthy and powerful for their own gain.

So we're launching a new Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption. We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We'll publish what we find as a major series in the summer of 2020, including a special issue of our magazine, a dedicated online portal, and video and podcast series so it doesn't get lost in the daily deluge of breaking news.

It's unlike anything we've done before and we've got seed funding to get started, but we're asking readers to help crowdfund this new beat with an additional $500,000 so we can go even bigger. You can read why we're taking this approach and what we want to accomplish in "Corruption Isn't Just Another Scandal. It's the Rot Beneath All of Them," and if you like how it sounds, please help fund it with a tax-deductible donation today.

We Recommend


Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.


Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.