Will the euro crisis flare up again?
What’s happened?
n 21 July the European Central Bank (ECB) raised its key interest rate by 0.5% to 0%. It was the ECB’s first hike in over a decade and ended the era of negative interest rates. ECB president Christine Lagarde also introduced the bank’s new “transmission protection instrument” (TPI), a plan to prevent governments in the euro area’s periphery from being submerged by rising borrowing costs. The ECB says that it will buy the bonds of countries it believes are suffering “unwarranted, disorderly market dynamics”. As Marcus Ashworth on Bloomberg puts it, “TPI” might as well stand for “To
