Dear Reader,
This week is going to bring some interesting developments on various key fronts in German politics.
Germany’s new man at the ECB
The European Central Bank is meeting on Thursday to decide on whether to combat inflation by announcing a hike in interest rates. Pressure has grown on the Eurozone central bank to react since the Fed announced similar measures for the US last week.
It will be the first time that new Bundesbank head Joachim Nagel takes part alongside central bank heads from the other 18 Euro states. As a reminder, his predecessor Jens Weidmann unexpectedly announced his resignation last autumn. Although Weidmann said he was moving on for private reasons, his exasperation at the ECB’s expansive monetary policy was no secret.
With inflation rising sharply in Germany, the credibility of the ECB - which long said that the prices rises were a temporary phenomenon - is being called into question. Monetary hawks fear that southern Europe will block a rise in interest rates …
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