An analysis of the effectiveness of the ECB’s monetary policy in the light of the Eurozone’s structural problems.

As of 2016, the Eurozone has still not fully recovered from the devastating effects of the economic crisis, despite various measures implemented by the ECB. This paper will focus on the reasons why some of the ECB’s monetary policy has been ineffective. The framework of the Eurozone and the instruments used by the ECB will be discussed, as well as the structural and institutional differences between countries in the Eurozone. An assessment will be made of the policy implemented by the ECB and their overall effectiveness. This paper shows that there are indeed positive short run effects of these policies, but the long run effects are not as positive, mainly because the huge underlying structural differences in the banking sector and sovereign balance sheets are not being resolved.