June 15, 2022— As the central bank for the Eurozone pursues a path to normal policies, the risk it now faces is uneven impact among the 19-member countries.
Borrowing costs in so-called vulnerable countries like Italy, Greece, and Spain are soaring in response to monetary tightening last week by the European Central Bank (ECB). Now fragmentation of the Eurozone is a concern. As a result, the ECB announced today it is adjusting its plans. For one, the ECB will consider the vulnerabilities when reinvesting payments maturing from its pandemic relief program, known as PEPP. Those reinvestments of maturing PEPP payments are scheduled to continue through 2024. The program’s worth is estimated at 1.85 trillion euro ($1.9 trillion), according to the New York Times.
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