The ECB Won’t Escape Europe’s Earthquake
‘Evolving’ monetary policy needs to cope with greater German borrowing and the tremors it will send.
The European Central Bank’s glass tower at Frankfurt’s former wholesale market hall.
Photographer: Michael Gottschalk/Photothek/Getty
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Shibboleths are shattering in Europe. In the last week, it’s abandoned assumptions about its defense and how it runs fiscal policy that had endured for a lifetime. Amid that drama, the European Central Bank cut target rates by 25 basis points and announced that its monetary policy had become “meaningfully less restrictive.” If this sounds boring compared to the other volcanic European shifts, that’s because it is. But there’s still a change. The ECB’s own confrontation with Europe’s shifting tectonic plates will come soon.