CNBC: Europe Sets To Fight Eurozone Fragmentation And Rise In Borrowing Costs

The European Central Bank is planning to save the region’s economies from the impacts of the covid and to help them overcome the current crisis. According to CNBC, the ECB plans to introduce a new instrument for this purpose.

The key goal for the ECB’s leadership is to prevent euro zone fragmentation.

According to the Central Bank of Europe’s statement, authorities of various eurozone nations have been confronted with the problem of extremely costly money borrowing, which is not common in the area. As a result, monetary policy is distributed unevenly between countries. Italy’s government debt rates, for example, had surpassed 4% by the middle of this month.

Furthermore, the ECB’s current predicament is exacerbated by the rapid rise in bond rates in a number of countries. The central bank has no choice but to tighten policy and raise the base rate. According to the Central Bank, the first rate hike in ten years might happen during the July meeting this year.

source: cnbc.com

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