The European Central Bank intends to push new tools to fight the risk of differentiation. The real test is still behind?

On June 20, local time, the European Central Bank governor Ragard said in a testimony of the Economic and Monetary Commission of the European Parliament that the European Central Bank plans to raise interest rates twice in July and September this year. The increasing spread of borrowing costs in different countries in the district.

Lagarde also stated on the same day, "We intend to increase interest rates by 25 basis points at the monetary policy conference in July and raise interest rates again in September. It is absolutely certain that our monetary policy is aimed at all countries in the euro zone. . "According to Bloomberg, officials of the European Bank of China predicted that the interest rate hike in September may be 50 basis points.

For the new tools that the European Central Bank is about to finalize the risk of the euro area, some professionals believe that its effectiveness is still doubtful, and the real test of the euro zone may have come.

Image source: Visual China-VCG111376772894

New tools for brewing and cope with the crisis

Prior to Lagarde's speech, the European Central Bank held an emergency meeting last week, saying that it would accelerate the formulation of a "defending the integrity of the euro zone" to cope with the expansion of the spread of loan costs in different countries in the euro zone. Lagarde said on Monday that this "crisis measure" was also to observe the European Central Bank's commitment to control inflation.

According to the disclosure of the European Central Bank, it will introduce a flexible method to reinvest the redemption funds of the emergency bond purchase plan, and will inject cash into countries with heavy debt in the large -scale support plan, such as Italy.

At present, the details of the tool have not been announced. According to Bloomberg, a person familiar with the matter reports that the tool will be finalized before the policy meeting of the Central Bank of China from July 20th to 21st.

Lagarde said that when the risk of differentiation occurs, it can solve the problem through appropriate tools and sufficient flexibility. This tool will be effective and appropriate, and at the same time within the control scope of the European Central Bank. "Anyone who doubts this determination may make a big mistake," she said.

Member of the European Central Bank Management Commission Martins Kazaks talked about how the tool played the role in an interview with the media. He said that if you need to take action, the European Central Bank will play a decisive control, but As the European Central Bank withdraws from long -term negative interest rate policies, the tool must also face the situation where the financial market fluctuations are intensified.

Since the State Bank of the European Central Bank has transformed the attitude of monetary policy, the euro zone bonds have been selling big dramas, especially for countries with large debt. Taking debt accounts for more than 150%of the GDP as an example, its ten -year Treasury yield reached 4.188%last Monday, setting the highest record since 2014. The ten -year Treasury spread between Germany and Italy also expanded to 2.47%last Monday, the highest in two years.

However, in the eyes of some analysts, the role of the aforementioned tools is still doubtful. Financial analyst Richard Cookson wrote in the latest comments published by Bloomberg, "Reinstream funds will flow to the peripheral market, not the core market ... I can't imagine Germany or other countries. Agree with the plans of the European Central Bank, unless it has also reached an agreement to accelerate currency tightening. In addition, even if the peripheral spreads are curbed, the yield of the core national bonds will continue to rise sharply. If this explanation is correct, the next step is to usher in the next step. The euro rises. "

He also wrote in another comment article, "This year may be a critical moment for the successful euro."

Lagarde: confidence in the economy of the euro zone

In his speech on the same day, Lagarde said that the current pressure of European salaries showed a moderate increase in rising, and said that he had confidence in the economy of the euro zone.

"Salary growth has begun to rise, although it is still mild," Lagarde said. "We predict that under the support of the labor market tight, the lowest salary growth, and some compensation effect on the high inflation rate, the growth of Negotiated Wages will rise further in 2022, and the predicted period is higher than the average level. "

Although the European Central Bank reduced the growth forecast of this two years in June, it is also expected that inflation will accelerate significantly under the situation where energy and food costs are soaring, but Lagarde said on Monday that it is full of confidence in the economy to continue to expand. Essence

"The Russian -Ukraine conflict is seriously affecting the economy of the euro zone, and the (economy) prospect is still full of uncertainty," she said. "But the economy continues to grow and the conditions for further recovery in the medium term are already available."

However, according to Bloomberg, according to the Weil's European Dilemma Index, more than 3,750 corporate data from Germany, Britain, France, Spain, and Italy have been summarized. Since August 2020, the European market's corporate dilemma is close to two years close to two years. High.

"If this upward trend continues, we expect liquidity pressure to increase, the credit market will be further tightened, and some companies will be difficult to obtain financing and eventually face breach of contract." Neil Devaney said. "Economic prospects have become more challenging."

Daily Economic News

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