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Analysts at Natixis explained that there is real uncertainty about the euro zone’s economic situation.

Key Quotes:

“Its unemployment close to structural unemployment; growth is then limited by supply, or is unemployment far from structural unemployment; growth then remains strong if demand is vigorous enough?”

“Faced with this uncertainty, the ECB and governments must answer the following question: is it worse: 1. To maintain expansionary economic policies although they are pointless and even dangerous since production is limited by supply; 2. To switch to restrictive economic policies at a time when demand should still be stimulated to return to full employment?”

“The ECB has clearly chosen the second answer, and it maintains an expansionary monetary policy; on average, governments have chosen the first answer and they are reducing their fiscal deficits.”