Zero Interest Rates, ECB "Fiscal Policy" and Beyond

By considering the ECB interest ratite policy over the period 2012-2021, it is noted that the key rates have followed a decreasing trend, up to reaching the zero or near zero level. The 3 M Euribor touched zero in 2015 and the 10 Y bund in 2020. The inauguration of the zero interest rates policy took place in 2012, in connection with negative rumours against the robustness of the Euro (the most important and significant realization of the EMU). The policy proved efficient from several points of view. It resulted very supportive for most EMU highly indebted governments by strongly reducing their costs for the debt service. To implement this policy, the sustainability of the banking sector has required several special measures: the most important one has been moving the bank deposit rate from the usual positive level to a negative level that may be intended as a custody rate. There have been important consequences in terms of Income distribution among the principal institutional sectors of the economy (households, firms, banks, Government sector). Very synthetically: the Government sector has been advantaged, whereas the private sector has paid, because the return from bank deposits has become negative. The paper concludes by shortly revisiting Keynes' "stamped money", something that turns out very similar to deposits carrying a negative interest rate. A short look to future problems is also included.