ECB announces exceptional meeting this Wednesday (15)

The ECB (European Central Bank) will hold an exceptional meeting this Wednesday (15), a week after announcing a tightening of monetary policy to combat inflation, accompanied by a widening gap in borrowing costs between states in the euro.

“The Governing Council will hold a meeting on Wednesday to discuss current market conditions,” an ECB spokeswoman told AFP.

The spokeswoman did not specify the agenda for the surprise meeting in Frankfurt.

Last week, the ECB announced that a cycle of interest rate hikes to combat inflation would begin in July and that a new series of interest rate hikes would begin in September.

This change in monetary policy is accompanied by the risk of fragmentation of the Eurozone sovereign debt market, which would cause European states to borrow at very different levels, penalizing those considered to be more fragile.

The market reaction was immediate and Italian debt yields began to rise, increasing the spread with the German Bund.

ECB officials have insisted they are ready to intervene urgently if the risk of sovereign debt market fragmentation increases, but many observers lamented the institution’s lack of a concrete solution.

“We will not tolerate changes in financing conditions that go beyond fundamental factors in eurozone countries that would cause their borrowing costs to skyrocket,” ECB council member Isabel Schnabel said in a speech on Tuesday. ) at night in Paris.

“There is no doubt that, when necessary, we can and will implement new instruments to guarantee the transmission of monetary policy and, therefore, our fundamental mandate which is to guarantee price stability,” he added.