Statement of March 12, 2020
DIW president Marcel Fratzscher comments today's announcements by the ECB as follows:
The ECB - together with the SSM - is sending a strong signal with its comprehensive package, which will help support bank credit to the real economy. The ECB has decided on a smart package that will help in particular small and medium sized enterprises to survive an imminent recession. Nevertheless, the ECB alone will not be able to prevent the economic slowdown. All large central banks of the world have proven their determination to fight the economic slowdown with an early and decisive set of policy measures. This is important for strengthening trust by markets, companies and citizens. The ECB is also sending a strong signal that now also governments need to act more decisively and courageously. Governments in Europe should act through a coordinated fiscal stimulus program and must not rely on central banks to do the governments’ job in fighting the recession. The ECB decision is likely to be criticized again in Germany as it yet again has loosened its monetary policy stance in order to support the economy and financial stability. I expect this to be the beginning of a set of additional monetary policy measures by the ECB to fight an imminent recession in the euro zone.