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This paper uses an event-based analysis to describe how the European Central Bank’s (ECB’s) policy responses to the pandemic crisis have affected the European financial and economic system. The result of our exercise, which is based on the examination of the main measures taken by the ECB during 2020, is that these responses have positively affected the European economic system by improving banks’ lending activity and by indirectly creating room for expansionary fiscal policies in the euro area’s high-debt countries that do not have fiscal capacity.

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Together with Wicksell and other German speaking authors, Schumpeter re-defined the foundations of monetary theory replacing the traditional view of money as a "veil", which facilitates exchanges, with the concept of money as capital, which acts as an essential premise for the starting of new production processes. However, these results were not enough to give credit to Schumpeter as monetary theorist. The present paper aims to show that this scanty renown of Schumpeter's monetary theory is due to his attempt to reach a close integration between the monetary and the 'real' aspects of the economic system. This attempt implies, in fact, that Schumpeter does not examine the traditional monetary problems but deals with those money functions which are an essential part of the cyclical evolution of the economic system. Such functions, in their turn, found the so-called 'credit theory of money', as opposed to the 'monetary theory of credit'. The 'credit theory of money' represents the main subject of this paper.5

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