Both sides of the same coin

English2019. nov 20.GOVERNOR MATOLCSY100WORDS

Mr Draghi was right a couple of weeks ago that fiscal policy should become the main instrument to stimulate demand /Martin Sandbu, FT, 18 September 2019/. He was also right to urge an explicit euro-level stance in 2014. His parting gift was aimed to use monetary policy on the other side of the same coin.

However, it is blatant that both sides of the coin are hostages of former political decisions. Fiscal policies are in the cage of the outgrown Stability and Growth Pact and the monetary policy of the ECB is in the cave of the outdated Maastricht Treaty.

Both the fiscal policies of the eurozone countries and the monetary policies of the ECB should be rid of their chains.

Re “Eurozone wakes up to Draghi’s demand for fiscal stimulus”

Governor Matolcsy, MNB, the Central Bank of Hungary

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