The ECB are ramping up the rhetoric that member states need to do more
It struck me at the last ECB meeting that Draghi went in stronger than usual about governments doing their bit to help their own economies, and we haven't stopped hearing the same noise from other governing council members either, including Coeure today.
The ECB turns the volume up today by issuing a report in its latest bulleting detailing how higher public investment would benefit the Eurozone.
The report say that the ECB's findings strengthen the case that an increase in public investment in a country, while in a low rate environment, would create a short term output stimulus for the rest of the Eurozone. It goes on to say that investment that's financed by debt or increased revenues leads to a significantly larger output gains than investment derived from cutting other public expenditure. But, any investment funded by higher public debt must be considered in tandem with fiscal stability. Of course, when talking "large countries" there will be sly glances towards Germany.
The ECB have been banging this drum for a long while and perhaps they should have been banging it at full volume from the get go, not years later and after throwing the monetary policy kitchen sink at the problems at the last meeting.
Unfortunately I would hazard a guess that this report will be used as a coffee cup coaster in many government offices across Europe by the end of the day.
Governments to act on latest ECB report