ECON – EU Parliament: Big central banks and big public debts, in-depth analysis

Like most advanced economies, the euro area emerges from a series of historical shocks with larger public debts, a sizeable increase in the already large balance sheets of the Eurosystem central banks, and intensified links between fiscal and monetary policies. The governments and the ECB must now undo what they did. Corrective action must not wait, if only because other shocks may again unexpectedly occur. The paper also presents a procedure to cut public debts.