Economics
The ECB Is No Longer a Reliable Cash Machine for Governments
- Lower earnings are tangible evidence of subsidy to lenders
- Central banks from Estonia to Austria anticipate squeeze
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Euro-zone monetary policy is subsidizing the finance industry to such a degree that national central banks are having to curtail the cash distributions they normally hand to governments.
The sting in the tail of the European Central Bank’s massive pandemic stimulus, in particular its so-called TLTRO program of loans, is that monetary authorities from Estonia to Austria are facing reduced earnings. That means less money feeding into national treasuries.