How the ECB can tackle fragmentation in the eurozone – Lorenzo Bini Smaghi – Financial Times
The European Central Bank is faced with a dilemma. It needs to tighten monetary policy in order to rein in unexpectedly high inflation and at the same time prevent fragmentation of financial markets across the eurozone. History shows that fragmentation comes not only with a high economic cost to growth and jobs, but also potentially a high political one, with loss of public confidence in European institutions. However, the present instruments to address fragmentation have important limitations.