benoit cœure : interview in alternatives economiques interview with mr benoit cœure, member of the executive board of the european central bank, in alternatives economiques, conducted by ms sandra moatti and published in the may 2015 issue of the magazine. * * * there is a great deal of discussion about the effects of qe. what can you hope to achieve when long - term yields are already extremely low? within the euro area, the transmission channel that is almost the most important in my view is confidence. confidence that the ecb will take its mandate to keep inflation below, but close to, 2 % seriously. before we took this step there had been doubts about the willingness of the ecb to respect its mandate. but it was the only substantive measure possible in the circumstances ; we had run out of conventional measures because the scope to lower key rates had been exhausted. the second channel is to lower borrowing costs, which aren ’ t negligible for companies and households. the policies combating fragmentation in the euro area have borne fruit ; now when interest rates for government borrowing fall it has a noticeable effect on corporate borrowing costs across the euro area – which was not the case even two years ago. that ’ s essential if investment is to recover. sure, rates are already low, but since qe was announced and implemented at the start of march long and very long - term interest rates have fallen significantly in all countries, including germany and france, and even more in spain, italy and those most affected by the crisis, such as ireland and portugal. the third channel works through portfolio rebalancing : it ’ s still too soon to assess that. bank and non - bank investors who sell us their securities have a very strong incentive to invest elsewhere rather than leave their money doing nothing, with deposits at the ecb costing – 0. 20 % p. a. the sharp upturn in the real economy should encourage them to lend more to business. in that sense, the time is right : the impact of qe is being felt just as the recovery is being confirmed, and it will reinforce it. it ’ s a mechanism that is potentially powerful. the final channel, of course, is the exchange rate : this is not an objective in itself, but it reflects market participants ’ expectations of the different monetary policies being pursued on each side of the atlantic. if you include the oil price too, you have a combination of factors favouring recovery and investment

leaving out greece, which is a very specific case in the light of the discussions ongoing at the moment. it was greece that i had in mind... the exit of greece is not a scenario we are working on. all the efforts being made at the moment are aimed at updating the relationship with greece in the light of the new priorities of its government, within a framework which remains that of the euro area and which implies rights as well as the duty to respect the common rules. so we are not putting the question in those terms. you expressed your concern about long - term growth. couldn ’ t the ecb do more to relaunch investment in europe in particular through more targeted policies? it is not for the ecb to encourage particular investment decisions which form part of this or that policy. to do so would be to cross the line between monetary and economic policy. however, everything we are doing at the moment forms part of an approach aimed at rekindling investment. compared with the traditional policies of central banks, which are geared to the short term, qe is an extension of the intervention horizon of monetary policy. for instance, the average term of the securities purchased as part of qe is nearly nine years. so monetary policy is having more impact than before on the financing conditions for longterm investments. this is particularly crucial for financing investments linked to the energy transition. in short, we are creating favourable conditions for long - term investment, and it is up to the governments and the european institutions to take advantage of these conditions. bis central bankers ’ speeches