BUSINESS MAVERICK OP-ED: Outgoing European Central Bank chief’s dangerous farewell

The ECB is not a normal central bank. It serves a confederation of countries – a Europe of nation-states – and conflicting interests are embedded in its decision-making. This results in delays and half-measures.

The clash of interests among eurozone member states is straightforward. Until recently, inflation in Germany had been around 1.5% per year; in France and Italy, it has been closer to 0.6% . Lautenschläger is right that Germany is nowhere near deflation, but one more downward shock could push the French and Italian economies there.significant and impactful

And, as Germany’s population ages, returns on savings have become a major economic and political issue – giving German policymakers another reason to oppose further reduction of interest rates.

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