ECB President Christine Lagarde recently confirmed that the European Central Bank (ECB) will initiate a turnaround in interest rates in July – the base rate is initially to rise by 0.25 points.
The general tenor of the leading articles and comments, particularly in the German media, on this first interest rate hike in the euro area in eleven years is foreseeable: “finally”, “too late”, “too tentative”. In hardly any other euro country are there more supporters of this rate hike than in Germany.
From today’s perspective, it would undoubtedly have been wiser if the ECB had exited the anti-deflationary course taken by Lagarde’s predecessor, Mario Draghi, earlier. When viewed soberly, the deflation Draghi fought was never a real problem, but more of a specter seen primarily by the Executive Board and the majority of the Governing Council.
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