"In this environment, it will become increasingly difficult (for governments) to push through unpopular reforms which are inevitable in order that the economic and monetary union economy recovers and for the continued existence of the monetary union".
- Joerg Kraemer and Marco Wagner, Commerzbank
Donald Trump's surprising election victory combined with the post-Brexit uncertainty raised the question of whether the European Central Bank should provide additional monetary stimulus or not. The Central bank so far avoided talks about the future path of its Quantitative Easing program, which releases 80 billion euros a month into the economy and is set to run until at least March of 2017. Nevertheless, analysts widely expect the ECB to unveil more stimulus measures at its next meeting on December 20 amid the uncertainty over Trump's policy. Most analysts anticipate the Bank to extend its bond-purchasing program by at least six months. However, the market reaction to Donald Trump's unexpected win in the 2016 US election was less extreme than after the Brexit vote in June. Although the Euro zone is set to continue its recovery, results of the upcoming elections in Austria and Italy's referendum on constitutional changes, as well as next year's elections in France, Germany, and Netherlands could weigh on business sentiment and lower economic growth going forward into 2017. Following Mario Draghi's speech on Monday, the Euro depreciated 1.3% against the US Dollar, as well as dropped around 0.4% against the British Pound.
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