At a time when the outbreak of borrowing costs of states fears a crisis of sovereign debts, the ECB has announced the creation of an “anti -fragmentation” instrument to reduce the gap between the rate for the countries of the North and South of the euro zone.
Le Monde with AFP
At a time when the bursting of borrowing costs of the euro zone states, following the announcement of a tightening of monetary policy, revives the specter of a crisis of sovereign debts, the Council of Governors of The European Central Bank (ECB) held an exceptional meeting of its council of governors on Wednesday, June 15.
At the end of the latter, the institution has announced that it “will apply a certain flexibility in the reinvestment” of the obligations held for its emergency program launched during the pandemic (PEPP). The ECB has also instructed its teams to “accelerate” the design of a new “anti -prone” instrument to combat a too large spacing of rates between countries in the north and countries in the south of the euro zone.
The goal is to calm the recently appeared tensions on Italy’s borrowing rates in particular, while the pandemic has “left lasting vulnerabilities” in the euro zone. However, no details on the content of this instrument or its adoption calendar has been given.
Bruno Le Maire for a monetary policy that is “well targeted”
Shortly before this emergency meeting, Bruno Le Maire, the Minister of the French Economy, estimated that the normalization of European monetary policy “must be done gradually and anticipated”: “We do not want Brutality, we do not want decisions that could take economic actors by surprise and which would ultimately create more economic difficulties than anything else, “said the minister, who was expressed on the sidelines of the living room in Paris.
“We can clearly see that what guarantees the maintenance of growth – which is our priority -, the maintenance of job creation, the ability to finance ecological transition is visibility”, detailed M The mayor, adding that “this is the choice that was made by the European Central Bank, it was the choice that was made by Christine Lagarde, and that seems to me the only wise choice”. He also pleaded for a monetary policy which is “well targeted”, with a necessary “balance” between the fight against inflation and support for economic growth.
the concern of central banks
This emergency meeting of the BCE Governors’ Council intervened while the sovereign debt market has experienced strong turbulence since the central bank announced, last week, its intention to increase its rates from July directors to combat inflation. The American Federal Reserve (Fed) could also announce its highest increase in its guiding rates since 1994.
“There is inflation in Europe which is different from inflation in the United States. There is an economic situation in Europe which is different from the American situation. We therefore want to have a European monetary policy that normalizes Gradually and without brutality, “said Bruno Le Maire.