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THE STATE OF THE EUROPEAN UNION
56
ure from the point of view of its targeting to-
wards bank lending.
However, the conceptual importance of this
programme is very high. Through it the
European Central Bank is acknowledging that
laying down conditions to ensure the link with
the real economy is not inconsistent with
Eurozone monetary policy – and nor is establish-
ing reporting requirements for the banks that
tap the resources, as is done in Article 8 and in
Annex II of the ECB Agreement of 29 July 2014
that implemented the TLTRO Programme.
It seems clear that from this precedent the
question that immediately arises is why the rest
of the monetary expansion programmes are
not regulated as “targeted”. And why similar
reporting requirements are not laid down in
them.
Monetary policy and growth policy
The relationship between monetary policy and
economic growth tends to be focused from the
standpoint of the traditional dispute between
those who champion more expansionary poli-
cies and those who advocate restrictive policies.
The latter tend to argue that monetary policy
cannot be an instrument to boost growth. It is
not the aim of this document to enter into that
dialectic. Our standpoint has no bearing on
whether monetary policy should “be used” as
an instrument for economic expansion in gen-
eral or not. What we are interested in highlight-
ing in this report is how, from another stand-
point, economic growth is inseparable from
monetary policy.
While it may seem obvious, price stability is
not just the result of money supply develop-
ments, but also of developments in the demand
for money. While monetary policy tends to fo-
Chart 10.
Use of funds from the past and future TL TROs
Source:
ECB.
120
100
80
60
40
20
0
Refinancing
Jan 15 round
Jan 16 round
Future TLTROs
Jul 15 round past
TLTROs
Granting loans
Purchasing assets
11
64
28
20
59
25
12
51
41
14
25