Macroscopic Podcast Arno Wellens: New EURO credit CRISIS is looming [Part 1/2]
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Jan 13, 2026 
Arno Wellens, an independent financial analyst focused on European monetary issues, discusses the looming credit crisis in the Eurozone. He highlights structural fragilities, particularly the debt spirals in France and Italy, exacerbated by chronic budget deficits and demographic challenges. The ECB's efforts to maintain low interest rates are failing, leading to rising sovereign risk and political tensions. Wellens warns that a lack of credible monetary policy could drive capital flight as investors seek safer alternatives like gold.
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ECB Keeps Rates Artificially Low
- The ECB has repeatedly kept interest rates too low to protect fragile governments, creating inflation and distorted incentives.
- That prolonged suppression removed market discipline and encouraged persistent fiscal deficits in countries like France and Italy.
Markets Ignoring ECB Support
- Markets are starting to distrust sovereign debt despite ECB interventions, shown by rising French 10-year yields.
- That divergence means central bank policy no longer reliably controls borrowing costs for weaker issuers.
Monetary Toolbox Nears Exhaustion
- The ECB is running out of monetary tools: lower rates hit the zero lower bound and QE expansions approach impractical scale.
- Future recessions could force balance-sheet expansions to extreme levels, narrowing policy options.