European Central Bank policymaker Fabio Panetta stated that central banks in Europe could come under increasing pressure from governments dealing with rising demands for pension spending and industrial support.
Government Spending and Central Banks
Germany, France, and Italy are struggling to fund higher defense spending, revive industry, and sustain welfare systems strained by aging societies. Panetta’s remarks come amid signs of growing tensions between heavily indebted governments and their central banks, endangering decades of independence.
The U.S. Supreme Court recently refused to let Donald Trump fire a Federal Reserve governor, leaving the U.S. central bank isolated as the only agency shielded from presidential power. ECB President Christine Lagarde did not rule out having a role in next year’s French presidential election.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
