Rising rates pose a threat to Italy’s solvency and the stability of the eurozone.
At the very start of the Covid crisis, in March 2020, Christine Lagarde, president for a few months of the European Central Bank, had made a blunder that she would regret for a long time. Faced with a dangerous gap in borrowing rates between Germany (which refers) and Italy, she said: “We are not here to tighten the “ spreads ” », this differential between two interest rates which weighs on the solvency of the country. In the months that followed, the ECB had demonstrated the opposite: it did everything to keep the Italian rate at its lowest, having bought back, at the end of April 2022, 723 billion euros of Italian debt.
Now the danger is looming again, in an even more tense context. The board of governors of the central bank meets this Thursday, exceptionally in Amsterdam, in the Netherlands. A country known for its virtuous budgetary management and whose “hawk” governor Klaas Knot is hardly versed in monetary support for the most fragile countries…
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