Yesterday the European Central Bank (ECB) made a historic decision. It lowered interest rates to 0.75%, which is the lowest level ever. Term deposit facilities are at 0%. Still, more needs to be known about these decisions.
Once again people expect Draghi to buy up sovereign debt or announce a new long-term bank stimulus plan. The plan was accepted, because euro zone leaders arrived at an important agreement, but no laws have been changed and Draghi is carrying out his role.
Three or four years ago it would have been good enough to lower interest rates, but now the measure might disappoint investors. Significant steps are being taken, but it is time for Europe to put its money where its mouth is and carry out the changes it has proposed.
