The European Central Bank (ECB) is holding an emergency meeting today (June 15) to discuss
deteriorating financial markets and rising consumer prices on the continent.
Yields of bonds issued by Italy and other debt-laden nations have risen sharply since the ECB
said it plans to raise interest rates to counter inflation and wind down a debt-buying program it
initiated during the global pandemic.
Facing the threat of a repeat of the debt crisis that almost brought down the Euro zone a decade
ago, the ECB's Governing Council is meeting to discuss how to respond to recent stock market
turmoil and skyrocketing consumer prices, particularly for energy products.
Investors have pushed the spread between the yields of German bonds and those of more
indebted southern nations to their highest level since the height of the pandemic two years ago.
News of the ECB meeting sent the Euro currency soaring over half a percent to 1.0487 against
the U.S. dollar.
Options open to the ECB include channelling reinvestments from maturing bonds into markets
experiencing stress. But some analysts have warned that such a move is unlikely to be enough.
The ECB meeting comes on the same day that the U.S. Federal Reserve is expected to raise
interest rates by 75 basis points to cool off inflation that is running at a 40-year high in America.
The last time the ECB held an unscheduled meeting it introduced the “Pandemic Emergency
Purchase Programme,” a 1.7 trillion-euro bond buying plan that was its main tool during the
COVID-19 crisis.
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