Economic divergences among Eurozone countries have played an increasingly important role in ECB decision-making since the start of the crisis.

Document Type

News Article

Publication Title

LSE EUROPP Blog

Department

Economics

Publication Date

6-7-2013

Abstract

Do national economic shocks, such as the debt crisis in Greece, influence ECB interest rate decisions? As Florence Bouvet and Sharmila King note, the ECB officially bases its decision-making on euro-wide data, rather than the situation in individual Eurozone countries. However, this ‘one size fits all’ approach may be inappropriate in cases where there are fundamental economic differences between individual countries. Outlining the results of a study into ECB decision-making, they find that national divergences, particularly among those in the Eurozone’s periphery, have played an increasingly important role during the financial and sovereign debt crises.

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The London School of Economics and Political Science, University of London, European Politics and Policy Blog

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