December 8, 2016
by Marcel Fratzscher
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Statement on the ECB decision (December 8, 2016)

The ECB decision is wise and balanced. It may disappoint many in Germany. The extension of the PSPP programme was inevitable as the risks to the euro area economy are still huge and the ECB is likely to miss its price stability mandate through 2019.

The ECB decision is wise as it leaves all options open. The ECB is introducing more flexibility through the changes to the PSPP programme. The ECB decision implies a longer period of low interest rates

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October 20, 2016
by Marcel Fratzscher
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Statement on today’s meeting of the Council of the European Central Bank (ECB), October 20, 2016

The ECB decision bears no major surprises. Draghi did not contradict market expectations of an extension of the QE program to be announced in December. Such an extension has thus become even more likely. I do not expect a reduction in the monthly purchases by the ECB. Such a step would disappoint market expectations and could trigger undesired market reactions. The latest economic news are not encouraging and give little cause for a fundamental change in monetary policy.

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July 21, 2016
by Marcel Fratzscher
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Statement on today’s meeting of the Council of the European Central Bank (ECB), July 21, 2016

The European Central Bank is facing a difficult dilemma. The slower the euro area economy is growing, the lower interest rates and the harder it becomes for the ECB to implement its public sector purchase program. The ECB has assumed a wait-and-see strategy in the hope that its new measures will be effective and the economy will not deteriorate further. Italy’s banking crisis, more than the Brexit, is an enormous risk for the entire euro area, also for Germany, and

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June 29, 2016
by Marcel Fratzscher
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Europe Needs to Show What It’s Made Of

This article was originally published in Handelsblatt Global Edition on June 28, 2016.

The Frenchman Jean Monnet, one of the founding fathers of today’s Europe, wrote that the process of European unity will “be accomplished in crises.”? The Brexit decision is a catastrophe for all Europeans. It is coming at a high price in political, social and economic terms.

But it is also a crisis that can make Europe significantly stronger – if politicians, especially in Germany, recognize and use

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June 27, 2016
by Marcel Fratzscher
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Making the Eurozone more resilient: What is needed now and what can wait?

This article was first published on VOXEU.org on June 25, 2016. 

Britain voted to leave the EU. This is terrible news for the UK, but it is also bad news for the Eurozone. Brexit opens the door to all sorts of shocks, and dangerous political snowball effects. Now is the time to shore up the Eurozone’s resiliency. The situation is not yet dire, but prompt action is needed. This VoxEU column – which is signed by a wide range of

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June 24, 2016
by Marcel Fratzscher
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Supplement: Statement on the result of the Brexit referendum

An important aspect, that has been widely ignored in the debate about the consequences of a Brexit, is the impact on ECB monetary policy. Lower oil prices and a weaker economy in the euro zone and in Germany are likely to increase deflationary pressures further. As a consequence, the ECB is likely to extend its expansionary monetary policy path further into the future. The Brexit will most likely imply a longer period of zero interest rates for the euro area.

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June 24, 2016
by Marcel Fratzscher
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Statement on the result of the Brexit referendum

The Brexit decision is a catastrophe for all Europeans. The economic costs will be enormous for all of Europe. Britain could slide back into recession. We at DIW Belin expect a 0.5 percentage points lower economic growth in Germany in 2017 as a result of lower German exports to the UK alone. The risk is highest for countries such as Italy, which are vulnerable and could slide even deeper into the financial crisis.
I expect major volatility in financial markets

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June 21, 2016
by Marcel Fratzscher
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Statement on the Federal Constitutional Court’s decision regarding the European Central Bank’s OMT program

The German constitutional court took a wise decision, but which is effectively a reversal of its earlier decision of January 2014. The court now accepts the authority and the decision by the European Court of Justice on the ECB’s OMT program of 2015. The backing down of the German constitutional court is a smart move, as it would inevitably have lost the battle against the European Court of Justice on issues of European law.

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June 2, 2016
by Marcel Fratzscher
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Statement on the Decision of ECB’s Governing Council 06/02/2016

The ECB has signaled that low inflation is likely to persist even longer than previously feared. The new projections by the ECB have increased the probability of an extension of QE beyond March 2017. The ECB is putting great hopes into its new liquidity program for banks in order to improve credit to the private sector, strengthen the economy and thereby raise the inflation rate.

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May 11, 2016
by Marcel Fratzscher
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Judy Asks: Can Debt Relief Save the Euro?

A selection of experts answer a new question from Judy Dempsey on the foreign and security policy challenges shaping Europe’s role in the world.

The question is not whether debt relief is needed, but how and when it will take place.

Almost one year after the Greek debt drama, which almost ended with Greece’s exit from the eurozone, the conflict between the Greek government and its European partners is again heating up. The bad news is that progress on Greek

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