On paper, the entire European Union has a single government interest rate, set by the European Central Bank. In reality, it hasn’t for years.
Lenders to struggling European countries have required higher bond yields (interest rates) in order to put their money with those governments. This is sensible, as many of which have at various times appeared on the verge of bankruptcy. But it also means that the countries in the eurozone that need money the most – Spain, Italy, Greece, Ireland and Portugal – find it most difficult to access funds.
Fixing this was the aim of the plan announced last night at the highly-anticipated monthly ECB meeting.