Eurozone Fragmentation Risk Resurfaces; ECB TPI Activation Unlikely

Fiscal risks in the Eurozone are back in focus as government bond spreads widen, though ECB officials show limited concern. Goldman Sachs highlights the ECB's tools, including the TPI, but sources indicate activation has not been considered, suggesting market stress is not yet at intervention levels. The key uncertainty is what conditions would trigger ECB action if spreads escalate further.

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