Some will argue that the ECB's head has been so deep in the
sand refusing to reduce interest rates when needed that for some
member economies the game is all but over. What is happening now is
too little and to late in many people's eyes and the European
Banking sector needs a total overhaul, which would mean an awful
lot of pain before any hope of gain and that is something very few
politicians have the stomach for.
Admittedly the ECB has very few tools with which to fix the
economy and it's recent decision to lower interest rates to an
historic low of 0.25% has left the tool bag lighter than ever. The
only option now is to reduce the benchmark interest rate to zero or
even into negative rates to stimulate lending which is a
possibility some market commentators are speculating over. The
preliminary inflation reading for October fell to 0.7%, which is
the lowest level in the 17-country currency area for four years,
and down from 1.1% in September and well below the
