Inflation in the Eurozone is now negative - specifically -0.2% in December. About the only thing that the European Central Bank is formally required to do is keep inflation at around the so-called optimal value of 2%. So, clearly, you are not doing a very good job.
I won't go into the question of why 2% is the "perfect" number. I'll just note that in a system where 97% of money is created as debt by commercial banks when they make loans, you probabably need inflation in order to pay the interest. But there can be no doubt that you will currently be under a lot of pressure to start pumping money into the economy to try and get the Eurozone economy working again.
Unfortunately, as you know perfectly well, the conventional method, which involves throwing huge amounts of money at commercial banks and praying, doesn't work. You tried that within a few weeks of taking office back in 2011 when you threw 1 trillion euros of very cheap money at hundreds of banks at December 2011 and February 2012. You provided 3-year loans at 1% interest, and of course, the banks will now have to pay the money back.
So, I suppose that you could throw another trillion at them, and do a bit more praying. Their lobbyists will certainly be pushing for that.
But the simple fact is that nobody wants more debt. Citizens don't want more debt. Businesses don't want more debt. Governments don't want more debt. And even Banks don't want more debt. As the 16th Geneva Report on the World Economy pointed out last september "the world has not yet begun to deleverage its crisis-linked borrowing. Global debt-to-GDP is breaking new highs in ways that hinder recovery in mature economies and threaten new crisis in emerging nations – especially China."
What we all need is some real debt free money. And that is where you could do something truly useful. As the head of a central bank, you should have the power to create the Eurozone's money. And you should do that money creation without creating simultaneously another mountain of debt.
How could you do that?
This could be done by creating ECB accounts for all Eurozone citizens via the Central Banks in each country. It would be essentially a huge excel sheet with 330 million entries - one for each Eurozone citizen. Citizens would be able to connect their ECB account to their normal bank accounts - just like you can currently connect a Paypal account to your bank account.
And then, when money needs injecting into the economy, you would just have to type "Add X euros" on the keyboard of the ECB's computer and bingo - there is X*330 million extra euros in the economy. As simple as that. No need for Quantitative Easing - which is effectively throwing money at Bankers and praying. No need to give money to governments (which you are not allowed to do because of the Lisbon treaty). But I don't think that there is anything that would stop you just putting new money into the economy this way - except of course massive resistance from the Banking sector.
Why would the Banks be so opposed? The reason is that, unlike the current money creation system, in which as much as 97% of the money in circulation is created by commercial banks as debt, this ECB generated money would be debt free, with no interest to pay.
What! No interest to pay! That is why we can expect massive resistance from the Bankers and the politicians that they control. After all, the Banks have been used to charging interest for lending fictitious money to individuals, businesses and governments since the creation of the Bank of England in 1694. For info, since that time, UK taxpayers have paid an average of 4.4% of GDP as interest payments on public sector debt alone. And 57.1% of all Public sector debt in the Eurozone (€5.2 trillion of the €9 trillion at the end of 2013) is entirely explained by the interest payments made on government debt since 1995 - as your own figures show.
Interestingly, this fact that commercial banks simply create our money supply out of thin air when they make loans, was stated with mindblowing clarity in a video last year by Bernard Maris, the French Economist massacred this week in the offices of Charlie Hebdo. His loss is absolutely tragic, but at least the number of people who have watched this important video has increased by 250% in the last few days.....
So, we can certainly expect massive resistance from the Bankers. They will fight like wild-cats to keep their gravy train on the rails. And, since you were previously vice chairman and managing director of Goldman Sachs International (2002-5), it's just possible that you may be more interested in protecting the interests of your friends in the Banking sector than helping European Citizens. Please, please, prove me wrong.
The fact is that there is no justification for allowing the money creation process to be the exclusive priviledge of commercial banks. Indeed, even economists at the IMF demonstrated that taking money creation away from commercial banks and tranferring that responsibility to central banks makes perfect sense. Specifically, they proved all four of Irving Fisher's claims for such a system when he proposed the so-called Chicago plan in the 1930s, namely (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation.
Somehow the Banking Lobbies apparently managed to get politicians (and economists) to forget about that one - just possibly because that's how they make nearly all their money. Perhaps you can explain to us what would be so terrible with such a proposition?
Oh, and if anyone wants to claim that this will produce Zimbabwe style hyperinflation, can I suggest that you could introduce an ECB regulated flat-rate Financial Transaction Tax on all Euro-denominated trading - wherever they occur in the world. Last year, LCH Clearnet Ltd, based in London, did €238,447,455,975,386 in Euro-denominated trades. A 0.01% tax on that lot would remove €24 billion from the system. Indeed, if needed, you could use the revenue generated by such a tax to directly finance an Unconditional Basic Income for all Eurozone citizens.
Imagine. With just two simple levers - one that pumps debt-free money into Eurozone citizens pockets, and one that sucks money out of the system in the form of a simple transaction tax - you would be able to do your job properly.