‘Madame Inflation’: ECB’s Lagarde faces down Germany, Italy

A toxic combination of soaring inflation, debt and internecine conflict threaten years of falling living standards in Europe, after European Central Bank boss Christine Lagarde again ignored its mandate of price stability for political purposes.

Any new tool for something like artificial yield curve control would be required to stop markets properly pricing Italian debt by demanding higher yields in compensation for the credit risk.Spreads between Italian and German 10-year debt narrowed on Lagarde’s comments and the free-falling euro reached new 52-week lows versus the US dollar.

Since its launch the euro has made the export and services-based southern economies like Italy, Spain, Greece, and Portugal uncompetitive and resulted in very high unemployment. in that they finance governments and any new policy tool specifically targeting this objective is open to another challenge.

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‘Madame Inflation’: ECB’s Lagarde faces down Germany, ItalyGerman calls to lift interest rates were ignored again on Thursday, as the ECB’s boss flagged plans for a potential new policy tool to bailout weaker members.
Source: FinancialReview - 🏆 2. / 90 Read more »