Lagarde Made History. Now, EU Voters Might, Too
The ECB broke 25 years of precedent with the Fed. Next up: European Parliament elections could swing to the hard right
Europe’s voters choose a new EU parliament Sunday.
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Let’s not underplay it. The European Central Bank did indeed cut rates Thursday, and in the process reversed a 25-year precedent. Since its founding in 1999, the ECB had never before cut unless the Federal Reserve had done so first. When departing from the Fed, it was hawkish, as witnessed in the disastrous decisions to hike rates shortly before the collapse of Lehman Brothers in the summer of 2008, and before the eurozone sovereign debt crisis reached its climax with the forced resignation of Italian Prime Minister Silvio Berlusconi in November 2011. Now, it’s setting out on its own, and that’s a big deal: