ECB Says Germany Could Boost Euro-Area Growth by Borrowing More
- Schaeuble aims to maintain balanced German budget in 2017
- Higher German spending would give euro area short-term boost
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Germany could give itself and the euro area a boost if it takes advantage of low interest rates to finance a public-investment program, the European Central Bank said.
That’s the key finding from an ECB study released Monday that simulates the effect of an expansion of public investment equal to 1 percent of gross domestic product over five years in a large euro area country such as Germany. It concludes that the stimulus would have a greater impact if it were financed by debt or higher revenue and accompanied by an expansive monetary policy.