Impact of the European Central Bank Monetary Policy on the Financial Indicators of the Eastern European Countries


  • Sergey Yakubovskiy Odessa I. I. Mechnikov National University
  • Halyna Alekseievska Odessa I. I. Mechnikov National University
  • Julia Tsevukh Odessa I. I. Mechnikov National University



The article presents the study results of the European Central Bank Monetary Policy influence on the Poland, Hungary, Czech Republic, and Slovak Republic financial indicators. By running vector autoregression models and applying Granger causality tests the study reveals the impact of the European Central Bank Monetary Policy on the yield of government bonds, interest rates and the inflow of foreign investments into the CEE countries. The results of the analysis demonstrate that the ECB monetary policy had an overall positive impact on the economies of Poland, Hungary and Czech Republic. In the context of a general decrease of interest rates under the influence of the ECB's unconventional monetary policy, these countries managed to achieve sustainable economic growth along with a decrease in the ratio of government debt to GDP and the ratio of interest payable on debt to GDP as well as stock indices growth. The opposite situation is observed in the euro area countries with a high debt burden, primarily in Greece and Italy. Although the ECB policy had led to the decrease of the interest payable on debt to GDP of the high debt euro area countries, the trend of the ratio of government debt to GDP growth for them (except Ireland) has an upward trend. In this situation, the ECB cannot significantly change the goals of its monetary policy, because any, even slight, increase in the discount rate will lead to a new euro area debt crisis with an epicenter in Italy and Greece. The situation may get worse after a probable sharp decline in the US stock market, caused by its current overheating

Author Biographies

Sergey Yakubovskiy, Odessa I. I. Mechnikov National University

Head of the Department of World Economy and International Economic Relations

Halyna Alekseievska, Odessa I. I. Mechnikov National University

Assistant Professor of the Department of World Economy and International Economic Relations

Julia Tsevukh, Odessa I. I. Mechnikov National University

Associate Professor of the Department of World Economy and International Economic Relations


Alekseievska H., Kyfak A., Rodionova T., Yakubovskiy S. (2019) Modeling Outcomes of Unconventional Monetary Policy International Journal of Recent Technology and Engineering (IJRTE) ISSN: 2277-3878, Volume-8 Issue-4, pp10263-10268. DOI:10.35940/ijrte.D4503.118419

Angelovska–Bezhoska A., Mitreska A., Bojcheva-Terzijan S. (2018). The Impact of the ECB’s Quantitative Easing Policy on Capital Flows in the CESEE Region. Journal of Central Banking Theory and Practice, No.2, pp. 25-48. DOI: 10.2478/jcbtp-2018-0011

Babenko V., Sidorov V., Koniaieva Y., Kysliuk L. (2019) Features in scientific and technical cooperation in the field of non-conventional renewable energy. Global Journal of Environmental Science and Management, No.5, pp.105–112. DOI: 10.22034/GJESM.2019.05.SI.12

Beirne J. et al. (2011) The Impact of the Eurosystem’s Covered Bond Purchase Programme on the Primary and Secondary Markets, European Central Bank Occasional Paper Series, No.122, pp.1-36.

Berge T.J. and Guangye C (2014) Global Effects of U.S. Monetary Policy: Is Unconventional Policy Different?”, Economic Review, Federal Reserve Bank of Kansas City, pp 5-31.

Chinn M. (2013) Global Spillovers and Domestic Monetary Policy. BIS Working Papers Bank for international settlements, No. 436, pp 1-56.

Ciarlone A., Colabella A. (2016). Spillovers of the ECB's non-standard monetary policy into CESEE economies. Questioni di Economia e Finanza, Bank of Italy, Economic Research and International Relations Area. No.351. pp 1-40.

Dahlhaus T.,Vasishtha G. (2014) The Impact of U.S. Monetary Policy Normalization on Capital Flows to Emerging-Market Economies. Working Paper Bank of Canada, No. 53, pp.1-28.

Darvidou K., Siskos E., Rogach O. (2020) Competitiveness of Travel and Tourism Sector in Greece and Ukraine: Comparative Analysis. Journal Transition Studies Review. Vol. 27, no 1, pp. 77–93.

Dominese G. (2019) Innovation and Growth in a Dual Technologies Scenario: Civil and Military top Advanced Industries Competition. Journal Global Policies and Governance. Vol. 8, no 2, pp. 3–43.

Dominese G. (2020) Dual Technologies Sectors Innovation and Growth Civil and Defence Industries in Europe versus U.S. and China, Journal Transition Studies Review. Vol 27, no 1, pp. 3–46.

European Central Bank (2015) The transmission of the ECB’s recent non-standard monetary policy measures, Economic Bulletin, No.7, pp. 32–52.

European Central Bank (2020) Accessed January 2020.

Falagiarda M., McQuade P., Tirpak M. (2015) Spillovers from the ECB’s non- standard monetary policies on non-euro area EU countries: evidence from an event study analysis. European Central Bank Working Paper Series, No. 1869, pp. 1-54.

Fratzscher M., Lo Duca M., Straub R. (2018) On the International Spillovers of US Quantitative Easing. The Economic Journal, No.128 (608), pp. 330–377. DOI: 10.1111/ecoj.12435

Georgiadis G. and Gräb J. (2016) Global Financial Market Impact of the Announcement of the ECB’s Extended Asset Purchase Programme. Journal of Financial Stability, No.26 (232), pp. 257–265. DOI: 10.1016/j.jfs.2016.07.009

Halova K., Horvаth R. (2015) International spillovers of ECB's unconventional monetary policy: The effect on Central and Eastern Europe. Institut für Ost- und Südosteuropaforschung Working Papers, No. 351, pp.1-29.

Hamilton J.D. Wu J.C. (2012) The Effectiveness of Alternative Monetary Policy Tools in a Zero Lower Bound Environment. Journal of Money, Credit and Banking, No. 44 (1), pp. 3-46. DOI: 10.1111/j.1538-4616.2011.00477.x

International Monetary Fund (2020) Accessed January 2020.

Krishnamurthy A. Vissing-Jorgensen A. (2011) The Effects of Quantitative Easing on Interest Rates: Channels and Implications for Policy. Brookings Papers on Economic Activity, No. 2, pp. 215–287.

Lesuisse P. (2017) External Monetary Shocks to Central and Eastern European Countries. Études et Documents. CERDI, No. 5, pp. 1-27

Matyushenko I., Danova M., Feoktystova O., Melnyk R. (2019) Formation of teams of performers of projects at innovative enterprises within the framework of the “Industry 4.0” concept. International Journal of Supply Chain Management. Vol.8, No.4, pp. 962–969.

Organization for Economic Co-operation and Development (2020) Accessed January 2020

Ramazanov S., Antoshkina L., Babenko V., Akhmedov R. (2019) Integrated model of stochastic dynamics for control of a socio-ecological-oriented innovation economy. Periodicals of Engineering and Natural Sciences, Vol.7, No.2, pp.763–773.

Rodionova T., Yakubovskiy S., Kyfak A. (2019) Foreign Capital Flows as Factors of Economic Growth in Bulgaria, Czech Republic, Hungary and Poland, Research in World Economy, Vol.10, No.4, pp.48-57. DOI:

Rogach O., Shnyrkov O., Dziuba P. (2019) Skewness-Based Portfolio Selection: Implications for International Investing in Frontier Markets. Journal Transition Studies Review. Vol. 26, No. 2, pp. 23–28.

Stann Carsten M., Grigoriadis Theocharis N. (2019) Monetary policy transmission to Russia & Eastern Europe. Free University Berlin, School of Business & Economics Discussion Papers No. 6, pp.1-46 DOI:10.17169/refubium-2372

Yakubovskiy S., Rodionova T., Derkach, T. (2019) Impact of foreign investment income on external positions of emerging markets economies. Journal Transition Studies Review, No.26(1), pp.81-91. DOI: 10.14665/1614-4007-26-1-005.

Yakubovskiy S., Rodionova T., Kyfak A. (2019) Inflow of Foreign Capital as a Factor of the Development of Current Accounts of the Eastern European Countries. Journal Transition Studies Review, No.26(2), pp. 3-14. DOI: 10.14665/1614-4007-26-001