The European Central Bank

Recent news shows that the European Union is in a major debt crisis that is affecting the rest of the world, economically. The European central bank, which functions similar to any other central bank, raised its interest rate to 1.25 percent, raised for the first time since 2008. The bank's main reason behind the increase in interest rate is to curb inflation, however there are many critics of the bank's recent decision. Poorer countries in the European Union like Portugal are against the increase because it is more expensive to borrow from the central bank. Countries outside the EU, such as the United States and England are also against the increase because they kept there own interest rates intact, even though both countries are facing inflation and other economic issues as well. The European Union is in recovery mode at the time and raising interest rates is a good idea to prevent excessive loaning to European countries, however, it is a very risky move to take because many other central banks have their interest rates a relatively low rate.

http://www.nytimes.com/2011/04/08/business/global/08iht-rates08.html?_r=1&ref=europeancentralbank