ECB Executive Board member Yves Mersch said in a speech that “it is imperative for all Member States to adhere to the common rules”, without naming Italy. And he emphasized ” two principles that are at the heart of effective policy in a democratic society.” “First, liability and control must be aligned, with important decisions taken only by those who will bear their consequences.” “Second, the discharge of democratic control must lie at the level at which policy decisions are taken.
Separately, Chief Economic Peter Praet warned in a Handelsblatt interview published yesterday that “Italy’s current financing conditions are much too tight for a country with weak growth and low inflation.” For now, Praet didn’t see any contagion effect so far. And, ECB won’t intervene if the problems are confined only to Italy. ECB conducts monetary policy for the Eurozone as a whole.
