The First Vice President and Minister of Economy, Nadia Calvinhas been relieved to receive European Central Bank“class =” link copy “> the decision of the European Central Bankto fight the fragmentation of public debt markets with a new “anti-fragmentation instrument” on which the Eurozone Ministers of Economy and Finance with the president, Christine Lagarde, at the Eurogroup’s monthly meeting. “It is good news that the European Central Bank has acted with such determination and efficiency to ensure financial stability in the euro area as a whole and to prevent any fragmentation in the public debt markets,” Calviño said in a statement. ‘get to the meeting.
Lagarde announced this Wednesday, after an emergency meeting, the decision of the entity to speed up the implementation of this new instrument, although at the moment it has not specified what it will consist of or when it will be launched. . The idea is to speed up the launch of the initiative in a context of rising risk premiums, particularly in southern European countries, such as Greece, Italy, Portugal or Spain. “We will first listen to Mrs Lagarde’s presentation to see the alternatives, but I believe that there will be a unanimously positive assessment of the decisive and effective action taken by the European Central Bank, which is clearly guaranteeing financial stability and there will be no fragmentation in the eurozone public debt markets. This must be our priority at a time marked by uncertainty and volatility due to the war in Ukraine, “Calvin insisted.
The decision has also been well received by the European Commission. “We think that the confirmation by the ECB of addressing the risk of fragmentation in monetary policy is very important,” because it will help “calm the markets,” said the Commissioner for Economic Affairs. Paolo Gentiloni, which acknowledges that the European economy is in turbulent waters and that the level of growth in 2022 will not be as expected, although this does not mean that a recession is inevitable. “It will be much lower but that does not mean we are destined for recession,” he said when he arrived at the Eurogroup. “This means we need to focus our fiscal policies on prudent reforms, investments and policies particularly in countries with high debt,” he recalled, calling for a prudent fiscal policy and the use of Next Generation EU funds to support investment.
Concern in the north
The ECB’s announcement has been received, however, with varying degrees of concern among Eurozone finance ministers. On the one hand, the Austrian Finance Minister, Magnus Brunner, has expressed concern over possible fragmentation and called on countries to “put their budgets in order.” He warned that “the ECB needs more room and can only have it if the budgets of all the member states are in order”. For the Dutch Sigrid Kaag, the ECB’s decision is a “major signal” to the war in Ukraine, inflation, supply uncertainty, the risk of hunger and hunger in Africa.
German has been less pessimistic Christian Lindner who He denied that there was a risk of fragmentation for the time being and recalled that the Eurozone was stable and the monetary union was strong. “We are seeing increases in risk premiums in some states, but there is no need to worry,” he told Luxembourg. “There is no reason to be nervous. The institutions make me confident that we can overcome any critical situation “, he said. However, he also made it clear that all member states, including Germany, must return to sound public finances, reduce deficits and follow a credible debt reduction path. “The ECB has a responsibility to fight inflation, but we must also take responsibility as finance ministers” and that responsibility is to “reduce deficits and get back on the path to debt reduction.”