"The ECB decided to raise interest rates today, despite the strain it is going to put on the Eurozone. Michael T. Darda explains in the WSJ what this could mean for the currency union:
If the ECB starts to tighten policy as expected, it could be a "lights out" situation for the beleaguered European periphery and a potential threat to the euro zone itself.
In more blunt terms, this move may have begun the countdown to the Eurozone breakup. It is hard to see how else this can turn out. The Germans--the folks who really call the shots in Europe--are reluctant to see the needed debt restructuring in the periphery and are equally reluctant to provide bailouts large enough to fix the problem. So far the Germans have been kicking the can down the road on these issues. With ECB monetary policy now tightening they will soon run out of road to kick the can down..."
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