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.