European Central Bank: Independence risks rise with debt – Commerzbank - FXStreet

European Central Bank: Independence risks rise with debt – Commerzbank - FXStreet

Source: FXStreet

DW NOTE

Commerzbank is stating the obvious: when debt servicing consumes an ever-larger share of the budget, central banks face political pressure to keep rates accommodative regardless of inflation. The ECB's balance sheet still holds €4.9 trillion in assets from the pandemic era, and eurozone debt-to-GDP ratios haven't materially improved since 2020. Independence is a nice principle until bond yields spike and finance ministers start making phone calls.

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