What would happen to euro-zone countries’ yield spreads against Germany if the ECB focused only on inflation?

What would happen to euro-zone countries ’ yield spreads (we look at France, Spain, Italy, Portugal and Greece) if the ECB returned to its pre-2012 conduct , i.e. only combated inflation? Indeed, the sharp rise in inflation in the euro zone will force the ECB to focus more and more on stabilising prices and less and less on its other objectives (including the sustainability of the various countries’ public debt). We can then look at: Where yield spreads were between the countries before 2012; What role Europe might play (e.g. ESM); How the situation has evolved with regard to public debt sustainability: potential growth, levels of public debt and primary fiscal deficits. We see that: When it was thought th at struggling countries would be bailed out, yield spreads were very tight : today there is the possibility of a bailout by Europe (by the ESM), which reduces the potential for spread widening; On the other hand, the determinants of public debt sustainability have deteriorated , which goes in the other direction .