“The weakness of the euro area gives the ECB no choice”

DIW president Marcel Fratzscher on the European Central Bank's latest announcements:

The ECB has signaled a reversal in its policy direction. The economic weakness of the euro area gives the ECB no choice but to return to a more expansionary monetary policy stance. I expect the ECB to implement a package of measures in September, including an initial deposit rate cut and a subsequent revival of sovereign bond purchases. Germany’s industrial weakness is making it one of the weakest links in the euro area. The German government needs to reverse course on fiscal policy. Germany’s position has been for too long to rely on ECB support while complaining about low interest rates at the same time. It is high time for the German government to implement a fiscal stimulus in order to counteract high global risks and uncertainty.