Germany is ready to ditch its balanced budget rules to battle the negative impact of the coronavirus outbreak on the economic activity, Bloomberg reported on Thursday.
This headline failed to help the market sentiment improve. As of writing, Germany’s DAX 30 was down 7.85% on a daily basis. However, the sharp drop in major European equity indexes seems to be a reaction to the European Central Bank’s monetary policy announcements.
At its March meeting, the ECB decided to keep interest rates on the main refinancing operations, the marginal lending facility, and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively. In the meantime, the ECB announced that it will be making additional asset purchases of €120 billion until the end of the year alongside new TLTROs.