ECB should focus on CDS spreads, not inflation
The markets measure eurozone break-up risk by analysing European sovereign CDS spreads. Marcello Minenna argues European monetary policy-makers should therefore make spread control their key goal
In Europe, the mood has improved over the past couple of years, but the fundamentals have not: EU treaties do not allow the European Central Bank (ECB) to print money to finance EU budget deficits, and the European public debt stands at roughly €10 trillion, with an average government debt-to-GDP ratio approaching 100%.
The lack of common structural rules for fiscal policies, such as taxation and transfer pricing, forces market participants to measure creditworthiness of EU countries via the
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