Helicopter money

Bailouts for people, not for banks

The Covid-19 pandemic has caused millions of people across Europe to lose their jobs and slashed their incomes. The European Central Bank (ECB) has prioritised multinational companies over ordinary people in their response to the crisis. Helicopter money – direct cash transfers from the ECB to Eurozone citizens – would help build a post-coronavirus economy which puts regular people first.

The coronavirus crisis could trigger an unprecedented recession across Europe. Millions of people have been made unemployed and are being forced severely into debt. The poorest amongst us are becoming even poorer.

Governments and central banks have a duty to respond quickly to any economic crisis to guarantee the economy does not spiral down into a disastrous long-lasting recession or depression.

It’s time for helicopter money

If the ECB implemented helicopter money now, we could stop Covid-19 causing a severe and long-lasting recession. But the bank is currently rolling out a programme of quantitative easing instead, providing no-strings-attached funding to banks and companies in a way which exacerbates already high levels of inequality across Europe.

Instead of pumping more money into financial markets, as the ECB is doing with quantitative easing, the bank should deploy helicopter money. It is a policy under which the central bank creates money and sends it directly to members of the public, in the form of unilateral transfers which do not have to be paid back. 

By sending €1,000 to every adult in the Eurozone, the ECB would provide exactly the kind of powerful boost needed to kickstart the economy once the Covid-19 public health crisis is over.

Direct money transfers like this are an immediate and equitable way of boosting private spending when our economy needs it most – without increasing the public and private debt burden. Helicopter money would also negate the need for EU policymakers to subject European countries to another round of misguided austerity after the coronavirus crisis has receded.

The medical emergency may be abating, but the economic emergency is going nowhere fast. Hesitating to act now will dramatically worsen the recession we’ve already been thrown into by the coronavirus.

The European Central Bank must seize the initiative and provide helicopter money to the public immediately, and build a people-centered recovery from Covid-19.

Latest news on helicopter money

New report: Mainstreaming Monetary Finance in the Covid-19 crisis

New report: Mainstreaming Monetary Finance in the Covid-19 crisis

With Eurozone governments spending huge amounts to fight the recession caused by Covid-19, the debt sustainability debate and how to manage it will only intensify in the coming months. Positive Money Europe’s new report, written by Sebastian Diessner, assesses the merits and drawbacks of different monetary finance proposals with the potential to revive the euro area economy.

read more

Why does helicopter money work better than quantitative easing?

It goes directly to the economy

Helicopter money is more direct. It stimulates the economy without relying on the financial sector’s transmission mechanism and its effects are therefore quicker to materialize than with QE or negative interest rates;

It can be legally implemented

Helicopter money does not violate the ECB’s monetary financing prohibition because it goes straight to citizens and not to governments. Helicopter money contributes directly to achieving the ECB’s mandate of price stability.

It is democratic and fair

Helicopter money treats all citizens equally instead of inflating asset prices for the benefit of the happy few.

It is sustainable

Using helicopter money does not entail piling up unsustainable levels of private or public debt. It would in fact help decreasing overall debt levels.

Helicopter money is not a new idea. It has been subject to a lot of academic discussions already, and supported by many economists. Even the former ECB President Mario Draghi said he found the concept “very interesting”!

Through our work with the QE for People campaign, we managed to bring more attention to this idea in the Eurozone and in the European Parliament. The next step is to make the European Parliament and national governments back the idea so that the ECB can use when the next financial crisis hits.

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what they say about helicopter money

“Helicopter money is a very interesting concept”
Mario Draghi

Former President, European Central Bank

“Helicopter money simply has to be in the toolkit.”
Martin Wolf

Chief economist, Financial Times

“All central banks can do it. You can issue currency and you distribute it to people.” 
Peter Praet

Chief economist, European Central Bank

Further resources

Helicopter Money as a response to the Covid-19 recession (2020)

This report outlines why and how “helicopter money” should be deployed as soon as possible in the Eurozone. It aims to help policymakers carefully prepare for the practical implementation of helicopter money.

Citizens' Monetary Dividend: Upgrading the ECB's Toolkit (2016)

The main contribution of this policy briefing is to show why helicopter money can be justified on legal grounds as a monetary policy instrument for the ECB. This key point refutes recurring claims that such a scheme would amount to “fiscal policy”.

Helicopter Money: A Cure For What Ails The Euro Area? (2016)

This short report by the Research Service of the European Parliament (EPRS) provides a fairly balanced summary of the state of the debate on ‘Helicopter Money’ in the Eurozone, mentioning arguments both for and against. The report was requested by Members of the European Parliament.

From Zirp, Nirp, QE, And Helicopter Money To A Better Monetary System (2016)

This paper written by Thomas Mayer from the Flossbach von Storch Research Institute argues why helicopter money would constitute a step towards a more effective monetary system. By distributing money directly to people, we could avoid the problems associated with money creation by private banks.

Central Bank Capital as an Instrument of Monetary Policy (2018)

Czech Republic’s central bank deputy governor Mojmir Hampl examines the use of central bank capital as a policy tool whereby the central bank employs digital currency to transfer digital cash to each household, thus supporting consumption directly when needed. The paper addresses several objections to this policy, paying particular attention to the claim that weakening the financial strength of the central bank endangers long-term price stability.

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