The collapse of the Italian government, just before the European Central Bank (ECB) raised interest rates for the first time in eleven years, seems like a harbinger of a bloody "hiking cycle".The Eurozone is in serious trouble.What is most surprising, however, is the ignorance of its top representatives, who keep postponing the solution to inflationary problems and as if secretly hoping that the rapid rise in prices will spontaneously, miraculously disappear.The increase of 0.50 percent, to which the Frankfurt institution has acceded, appears at first sight to be more drastic than the market expected.He didn't surprise me personally.If the bank were to send rates up by just 0.25 percent, it would make a complete mockery of the pursued goal of price stability.In today's hyperinflationary world, negative rates no longer have a place.On the contrary: the ECB should have shown more determination to beat inflation, shock the market and raise rates by, for example, a flat percentage point - which would at least help the euro, which is still flirting with parity against the US dollar.It is true that exchange rates show considerable sensitivity to unexpected changes in the interest rate differential, and it is also true that the weak euro acts as another pro-inflationary factor.However, seasoned observers know that the ECB would not embark on a hawkish surprise without ulterior motives.The trade was hidden behind the 0.50 percent rate increase.Specifically, the hawks got a bigger boost and the doves got an anti-fragment pack in return.In addition, ECB chief Christine Lagarde mentioned that the Governing Council does not plan to adjust the overall level of terminal rates upwards, but only seeks to spread individual rate increases more quickly over time.Another important piece of news is that the Frankfurt institution has abandoned its previous forward guidance – it will therefore not warn the markets in advance of where it will roughly go with interest rates.Monetary arithmetic will thus be purely determined by newly arriving macroeconomic data.This gives the bank a greater degree of flexibility.Finance and banking The European Central Bank has raised the key interest rate for the first time in a decadeThe leitmotif of the meeting was the presentation of the incriminated anti-fragmentation instrument (TPI – Transmission Protection Instrument).This should serve countries that are not yet devastated enough to have to resort to Draghi's famous OMT (Outright Monetary Transactions).Among the conditions for TPI activation is, for example, the point that countries do not suffer from significant macroeconomic imbalances or struggle with an unsustainable fiscal position.The anti-fragmentation package comes with a significant amount of non-transparency.The Board of Governors will start buying bonds the moment there is a non-fundamental increase in spreads.Although the ECB adds that it will be guided by a number of indicators, it keeps their specific form secret.A cynic would see in this a way to justify possible purchases.I consider the almost zero description of the mechanism of sterilization of bond purchases to be completely scandalous.At a time when it is grappling with unprecedented inflation, the ECB should make every effort to demonstrate that the TPI does not work against the current tightening of policy to tame the surge in prices.Instead, he said in his statement that the new bond purchases should not have "a lasting effect on the overall size of the ECB's balance sheet."In practice, this means that the ECB can increase its balance sheet during the transition period, which is completely absurd at a time when it is supposed to fight inflation.The central bank seems to bet on the fact that the very existence of the instrument can prevent the unmooring of credit spreads in the eurozone and, similarly to the case of the OMT, it may never actually be used in practice.However, global investors are usually not overly naive, and it is not at all excluded that they will start testing the firepower of TPI.The ECB referred many times during the meeting to the primacy of its mandate of price stability.However, this primacy is purely rhetorical.If the Frankfurt institution is really afraid of anything, it is the threat of the breakup of the Eurozone, i.e. political risk.Despite all assurances from the bank, an independent observer cannot help but feel that the ECB is embarking on fiscal redistribution.The coming months will show whether the Frankfurt institution will actually do more to restore price stability.I see the cancellation of forward guidance as a slight bright spot, which could de facto herald a faster pace of rate hikes.But I don't expect miracles.The specific actions of the ECB suggest that concerns about inflation occupy the minds of European central bankers cognitively less than fears about the fragmentation of the eurozone and other political risks.The video is being prepared ... Price increases in the Czech Republic - Development of basic food prices from 2015 to mid-2022 • VIDEO VideohubTry our calculators and compare your salary with other residents of the Czech Republic.Net salary Nursing allowance Net profit Self-employed Sickness Retirement age Pension amount Maternity Housing allowance Parental allowance Mortgage calculator Long-term care allowance Personal assessment base Life insurance Wage replacement