This is a crucial week for the euro. The European Central Bank (ECB) will finally initiate the turnaround on interest rates on Thursday. In view of the record inflation of a good eight percent, the monetary authorities have no other choice. Because the longer you let the prices run, the more they get going. Because the ECB reacts much later than other central banks, it should tighten the reins vigorously now.

But the inflation-stricken citizens will probably wait in vain for the central bankers to intervene. ECB President Christine Lagarde has already made it clear in advance that the galloping prices are by no means her biggest concern. The Frenchwoman’s main focus is on the fragile financial situation of university countries such as Italy and Greece.

A debt burden of 150 percent of gross domestic product (GDP) and more threatens to become overwhelming as interest rates rise. Especially since investors demand ever higher risk premiums if they mistrust a country’s creditworthiness.

According to the motto “Never waste a good crisis”, Lagarde is preparing to use the renewed crisis triggered by Russia’s war of aggression to take a big step towards monetary state financing. It is true that the central bank is expressly forbidden from providing such direct help to individual states in incurring debt. But with the argument that it is only concerned with saving the common currency area, the ECB is working on a new monetary policy program.

This so-called anti-fragmentation instrument is intended to ensure that Italy can continue to take out loans at similarly low rates as Germany. A new bond purchase program is to be launched for this purpose, with which the papers of the notorious debt sinners are then preferably purchased. The ECB would thus finally become Europe’s bad bank, which absorbs all the junk paper that can no longer be foisted on any other investor.

Where is the outcry from the governments in the more solid states against this impending breach of contract? The fact that Chancellor Olaf Scholz recently declared at his citizens’ talks in L├╝beck that inflation “will remain a problem for a long time” can certainly be seen by Lagarde as a helping hand.

In any case, the German head of government is not pushing for the ECB to finally do everything it can to counteract the rise in prices. It is fitting that SPD leader Saskia Esken is demanding that Germany should also suspend the debt brake in 2023. In the monetary union, the bad example sets a precedent. That is why the euro becomes the lira.

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