The aim of this thesis is to study the impact of expansionary monetary policy on the European
economies through the conceptual framework of the Austrian Business Cycle Theory. The European
Central Bank has continually reduced interest rates as a policy measure to counter the
sovereign debt crisis and this thesis examines the implications of this venture. From Germany's
perspective the viability of reverting to the Deutschmark in times of monetary instability is
also explored. The results based on the deductive reasoning principle of the Austrian School
are also discussed.
