Crisis countries pin their hopes on ECB
Spain and Italy are having trouble getting hold of fresh cash and want the ECB to purchase government bonds to finance their debts. ECB head Mario Draghi wants this help to be contingent on the fulfilment of tough conditions. But is saving the euro really the task of the central bank?
Il Sole 24 Ore - Italy | Sunday, 12. May 2013
According to a report in the magazine Der Spiegel the German Finance Minister Wolfgang Schäuble has voiced criticism of the idea of helping companies in the crisis-hit states of the Eurozone by buying asset-backed securities. Now Berlin is throwing a spanner in the works of the ECB even before it adopts a measure that doesn't meet with Germany's approval, the liberal business paper Il Sole 24 Ore complains: » more
According to a report in the magazine Der Spiegel the German Finance Minister Wolfgang Schäuble has voiced criticism of the idea of helping companies in the crisis-hit states of the Eurozone by buying asset-backed securities. Now Berlin is throwing a spanner in the works of the ECB even before it adopts a measure that doesn't meet with Germany's approval, the liberal business paper Il Sole 24 Ore complains: "Since the beginning of the euro crisis Germany has resisted all the measures of the ECB. Yet each time the German objections have been refuted by the facts. ... Now German Finance Minister Wolfgang Schäuble is making a pre-emptive strike, this time against the purchase of asset-backed securities (ABS) - something the ECB has not even decided yet and in which it wouldn't play the leading role anyway. The ECB is becoming a 'bad bank', the German media are echoing, before they are yet again proven wrong by the facts."
» to the homepage (external link, Il Sole 24 Ore)
More from the press review on the subject » Economy, » Euro crisis, » ECB, » Germany, » Europe
All available articles from » Alessandro Merli
Die Welt - Germany | Tuesday, 5. March 2013
According to news reports, the European Central Bank is considering leaving the so-called troika of euro bailout organisations comprised of the EU, the IMF and the ECB. That's the right thing to do if it wants to remain independent, the conservative daily Die Welt writes: » more
According to news reports, the European Central Bank is considering leaving the so-called troika of euro bailout organisations comprised of the EU, the IMF and the ECB. That's the right thing to do if it wants to remain independent, the conservative daily Die Welt writes: "The bottom line is that the ECB is wearing too many hats in the euro crisis. That must worry even those who view warnings that its price-stabilising mandate will be endangered as just German hysteria. This is also a question of democratic legitimation: the ECB's Governing Council is now the most powerful committee in European financial policy - although its 23 members were never elected by the people. ... If it always has a place in talks on fiscal bailout measures for ailing countries, it only stands to reason that politicians will demand of it not only expertise, but also money. Saying goodbye to this role would hurt the finance ministers, but it would not destroy the bailout mechanism."
» full article (external link, German)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Europe
All available articles from » Sebastian Jost
Main focus of Friday, 11. January 2013
The Governing Council of the ECB dashed hopes for a further drop in the key interest rate at its meeting on Thursday. Central Bank President ... » more
The Governing Council of the ECB dashed hopes for a further drop in the key interest rate at its meeting on Thursday. Central Bank President Mario Draghi was cautiously optimistic in assessing the effects of the ECB's crisis policies, but warned against proclaiming the end of the crisis. Europe's eagerness to reform must not slacken now, some commentators urge. Others warn that the Central Bank's cash glut is only worsening the crisis.
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Europe
Cinco Días - Spain | Friday, 11. January 2013
The optimistic mood after the meeting of the ECB's Governing Council should not induce the governments to complacent inaction, the left-liberal daily Cinco Días warns: » more
The optimistic mood after the meeting of the ECB's Governing Council should not induce the governments to complacent inaction, the left-liberal daily Cinco Días warns: "It seems obvious that the engine has sprung back to life and the stabilisation of the financial markets will be reflected in the economies of the Eurozone. But as the president of the ECB warned: we can't afford to sit back now and relax. We are still in a minefield, surrounded by the risks posed by the commodities, prices and policies - or rather the potential lack of action - of the governments. It would be a mistake to believe that the structural reforms that the crisis has provoked in Europe have been implemented, or that the list of tasks ends with fiscal consolidation. Frankfurt expects the upswing of the Eurozone economies to begin this year. But for this to happen not only the engine of the markets but also that of the reforms must be kept running."
» more information (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Europe
La Stampa - Italy | Friday, 11. January 2013
The decision of the ECB to continue propping up the real economy with cheap money is correct, but should not lead the nation states and EU institutions to neglect their reform efforts, the liberal daily La Stampa warns: » more
The decision of the ECB to continue propping up the real economy with cheap money is correct, but should not lead the nation states and EU institutions to neglect their reform efforts, the liberal daily La Stampa warns: "Thanks to the higher liquidity Europe's financial markets are recovering. The interest rates on government bonds are going down, share prices are rising and the credit crunch is not worsening. But two types of risk dampen the optimism: on the one hand the positive circle could turn into a vicious circle if the countries react to the sinking yields with a return to lax fiscal policies and break off their reforms. This would cause the risk premiums to rise once more and fear would return to the markets. On the other hand there is danger at the pan-European level: if the banking supervision reform fails and the new mechanisms of coordination and integration prove ineffectual, the European economy could once again collapse, and this time the individual member states would be less to blame than the central EU organs."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Europe
All available articles from » Franco Bruni
Corriere del Ticino - Switzerland | Friday, 11. January 2013
ECB President Mario Draghi has headed off speculation that the European Central Bank would lower its interest rate. This would have been yet another step in the wrong direction given that the flood of money is only intensifying the crisis instead of solving it, writes economist Alfonso Tuor in the liberal daily Corriere del Ticino: » more
ECB President Mario Draghi has headed off speculation that the European Central Bank would lower its interest rate. This would have been yet another step in the wrong direction given that the flood of money is only intensifying the crisis instead of solving it, writes economist Alfonso Tuor in the liberal daily Corriere del Ticino: "There are good reasons to doubt the wisdom of the expansive monetary policy. The cash injection mainly benefits the financial system, which so far has been neither restructured nor reformed. The results are obvious. The interest rates are being pushed down to record lows to the advantage of financial speculation and to the disadvantage of the small savers and pension funds. Share prices are rising and creating new speculation bubbles. … But even if these don't materialise and the economy recovers, the enormous amount of money that would be brought into circulation would drive up the inflation rate, which would force the banks to increase the base interest rate (very belatedly) - with the result that the economy falls back into a recession."
» more information (external link, Italian)
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Banks, » Europe, » Global
All available articles from » Alfonso Tuor
La Tribune - France | Thursday, 10. January 2013
At a press conference on the session of the European Central Bank's Governing Council, ECB president Mario Draghi unveiled the new five euro banknote, signed by Draghi himself. Once again the ECB has given its guarantee for the currency's stable future, the left-liberal daily La Tribune comments: » more
At a press conference on the session of the European Central Bank's Governing Council, ECB president Mario Draghi unveiled the new five euro banknote, signed by Draghi himself. Once again the ECB has given its guarantee for the currency's stable future, the left-liberal daily La Tribune comments: "With his signature on the new 'Europa' series of banknotes, Mario Draghi has made another symbolic gesture to inspire confidence in the resilience of the euro. The fact that the president of the European Central Bank is guaranteeing in some way the value of the currency is also proof that monetary matters remain too serious to be left in the hands of politicians. A euro signed by Mario is meant to show that the currency will be more stable, and not just because of the new safety features. This bodes well for 2013 and the future of the euro."
» full article (external link, French)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Europe
All available articles from » Philippe Mabille
Cinco Días - Spain | Wednesday, 9. January 2013
Spain government plans to get through 2013 without becoming dependent on the European bailout fund, the Ministry of Finance announced on Tuesday. The improved financial situation in the country is above all thanks to the help of the ECB, the left-liberal business paper Cinco Días points out: » more
Spain government plans to get through 2013 without becoming dependent on the European bailout fund, the Ministry of Finance announced on Tuesday. The improved financial situation in the country is above all thanks to the help of the ECB, the left-liberal business paper Cinco Días points out: "Spain's financial situation began to improve six months ago, with the ECB's announcement that it would purchase the bonds of troubled countries if necessary. This move by Mario Draghi was a turning point, changed the attitude of the markets and triggered a wave of purchases of Spanish public debt by foreign investors. The easing of pressure on the bond was also favoured by the expectation that Spain would request help from Europe - a possibility regarding which the government has never made a clear statement. This is now creating reasonable doubts about how the markets will react to the government's ruling out a request for a bailout."
» more information (external link, Spanish)
More from the press review on the subject » Economic Policy, » Federalism, » Spain, » Europe
Les Echos - France | Friday, 28. December 2012
The ECB head Mario Draghi and his US counterpart Ben Bernanke have stemmed the financial crisis in 2012 - now politicians must do their bit to solve both the economic and the social crisis, the liberal business paper Les Echos writes: » more
The ECB head Mario Draghi and his US counterpart Ben Bernanke have stemmed the financial crisis in 2012 - now politicians must do their bit to solve both the economic and the social crisis, the liberal business paper Les Echos writes: "Both bankers have been able to give a credible perspective to the investors, who are on the verge of a nervous breakdown. In this way they've taken control of budget leverage, previously the main tool of the politicians who are now bogged down in unsolvable problems of governance. ...Nevertheless it would be a mistake to believe the central bankers are magicians. ... They don't have the power to repair the economic motor, they can only inject it with fuel to prevent it from breaking down. In a nutshell: the end of the crisis on the markets does not mean that our problems are over, but that we have a little more time to deal with them. Now it's up to the politicians to seize the opportunity, carry out the much-needed reforms and restore the confidence that has been lost."
» full article (external link, French)
More from the press review on the subject » Fiscal Policy, » Economic Policy, » Financial Markets, » Europe, » U.S., » Global
All available articles from » François Vidal
El País - Spain | Thursday, 6. December 2012
The negotiations among the EU finance ministers on a European banking supervision authority were postponed to next week on Tuesday after failing to produce a result. German Minister of Finances Wolfgang Schäuble had voiced opposition to the idea of the ECB as sole supervisory authority. The left-liberal daily El País accuses Germany and the UK of jeopardising a solution to the bank crisis with their demands for special treatment: » more
The negotiations among the EU finance ministers on a European banking supervision authority were postponed to next week on Tuesday after failing to produce a result. German Minister of Finances Wolfgang Schäuble had voiced opposition to the idea of the ECB as sole supervisory authority. The left-liberal daily El País accuses Germany and the UK of jeopardising a solution to the bank crisis with their demands for special treatment: "Europe must stick to the idea of a joint central supervisory institution for banks, as is appropriate for a single market. It's obvious that this supervisory body can only be the European Central Bank, because it is the Eurozone's biggest creditor. If Germany and the UK continue to insist on delays and special rules that limit the jurisdiction of the future supervisory body, this stance must be seen as a prelude to the failure of the banking union and its key goal: the search for a joint mechanism for overcoming the banking crisis."
» full article (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Germany, » United Kingdom, » Europe
Expansión - Spain | Monday, 29. October 2012
Mario Draghi has been head of the European Central Bank since 1 November 2011. The conservative business paper Expansión is very enthusiastic about his performance during his first year in office: » more
Mario Draghi has been head of the European Central Bank since 1 November 2011. The conservative business paper Expansión is very enthusiastic about his performance during his first year in office: "His predecessor Jean-Claude Trichet bequeathed him a very complex situation. Because in addition to the debt crisis in Greece, Ireland and Portugal, there was the critical situation in Italy and Spain. In his first year in office Draghi has had to react to an unprecendented crisis. The growing weakness of the peripheral economies even threatened the entire survival of the euro. Draghi reacted with great pragmatism and remarkable diplomatic skill. He was able to combine the ECB's main goal - price stability in the Eurozone - with measures aimed first of all at alleviating the financing problems and then bringing about a solution."
» more information (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Europe
Il Sole 24 Ore - Italy | Thursday, 25. October 2012
ECB head Mario Draghi defended the European Central Bank's course in the euro crisis in the Germany parliament on Wednesday. Berlin's opposition to his policies may have left him with no other alternative but it was not right of him to give such explanations in the Bundestag, the liberal-conservative business paper Il Sole 24 Ore points out: » more
ECB head Mario Draghi defended the European Central Bank's course in the euro crisis in the Germany parliament on Wednesday. Berlin's opposition to his policies may have left him with no other alternative but it was not right of him to give such explanations in the Bundestag, the liberal-conservative business paper Il Sole 24 Ore points out: "Draghi has once again adopted a pragmatic approach. But in fact by law the ECB must only answer to the European Parliament, not to the national parliaments. … To grant an individual national parliament preferential treatment in this way is a violation of the institutional structure of the European Community without which any transfer of sovereignty to a central institution is invalidated. There is no reason why the German Bundestag should be more entitled to a justification than for example the Italian or the Slovak parliament. Pragmatism means acknowleding the power of reality, but at the same time one must be careful not to bow to the reality of power."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Germany, » Europe
All available articles from » Carlo Bastasin
Protagon - Greece | Tuesday, 23. October 2012
The Greek Finance Minister Giannis Stournaras on Monday warned that many people would starve if the country didn't receive the next instalment of the bailout package soon. The economist Giannis Varoufakis argues on the website Protagon that on the contrary Greece and Europe would be much better off without the loans: » more
The Greek Finance Minister Giannis Stournaras on Monday warned that many people would starve if the country didn't receive the next instalment of the bailout package soon. The economist Giannis Varoufakis argues on the website Protagon that on the contrary Greece and Europe would be much better off without the loans: "It would be a good thing if we didn't receive either this or the other instalments - and if they hadn't given us those we have already received. Because they can't throw us out of the Eurozone they would then be forced to really do something about the crisis - not just in Greece but in other countries of the Eurozone. If they deny us the instalments the European Central Bank would be forced to find a solution both for the bank systems and for financing the members of the Eurozone - one that goes beyond the logic of loans. The result would be an end to the crisis from Greece to Ireland and from Spain to eastern Germany."
» full article (external link, Greek)
More from the press review on the subject » EU Policy, » Domestic Policy, » Fiscal Policy, » Greece, » Europe
All available articles from » Giannis Varoufakis
Diário Económico - Portugal | Tuesday, 9. October 2012
Around a month after ECB president Mario Draghi announced potential unlimited purchases of the bonds of crisis states, the bank has yet to buy a single Portuguese bond. After Draghi explained the reasons to journalists, Pedro Carvalho writes in the liberal business paper Diário Económico that he is completely baffled: » more
Around a month after ECB president Mario Draghi announced potential unlimited purchases of the bonds of crisis states, the bank has yet to buy a single Portuguese bond. After Draghi explained the reasons to journalists, Pedro Carvalho writes in the liberal business paper Diário Económico that he is completely baffled: "He said that countries that have been given bailouts will only receive help in the form of supportive bond purchases once they have regained full access to the markets. [Portugal has so far only tested a return to the markets through positive bond auctions] ... Did I understand him correctly? We need the ECB to be able to return to the markets in 2013, but the ECB will only help us once we've already achieved this? Has everyone gone mad? Draghi's statements demonstrate that the new programme was not developed for peripheral countries like Portugal, Greece and Ireland: no, it was tailored to the needs of Spain and Italy. They also show that all the austerity measures that Portugal is in such a rush to implement could ultimately fail owing to a lack of investor confidence and the absence of a central bank."
» full article (external link, Portuguese)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Banks, » Portugal
All available articles from » Pedro Carvalho
Corriere del Ticino - Switzerland | Friday, 5. October 2012
At the council meeting of the ECB in the Slovenian capital Ljubljana, the bank's president, Mario Draghi, confirmed the contentious programme for purchases of the bonds of crisis-stricken Eurozone countries. At the same time he warned that the ECB could not replace government action. The liberal daily Corriere del Ticino fully agrees: » more
At the council meeting of the ECB in the Slovenian capital Ljubljana, the bank's president, Mario Draghi, confirmed the contentious programme for purchases of the bonds of crisis-stricken Eurozone countries. At the same time he warned that the ECB could not replace government action. The liberal daily Corriere del Ticino fully agrees: "Mario Draghi is not trying to put all the onus on governments with his words; he is merely calling on them to take more action. … Because although the bailout initiative launched by the ECB has had a positive impact, the economic problems of the crisis have not been solved. Therefore governments cannot afford to sit back and expect the ECB to fix the whole mess. … The warning was not aimed solely at the struggling countries but also at Germany and other countries in northern Europe that back the austerity policy. They must not leave it to the ECB to exert all the pressure on the crisis countries to implement the measures for their recovery."
» more information (external link, Italian)
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Banks, » Europe
All available articles from » Lino Terlizzi
Corriere del Ticino - Switzerland | Wednesday, 26. September 2012
In the event that Athens' creditors extend the deadline for Greece to implement the agreed reforms it would need an estimated 13 to 15 billion euros more than previously assumed. According to Finance Minister Yannis Stournaras, Greece wants to close the financing gap without further burdening European taxpayers. This is the consequence of a relaxed monetary policy, the liberal daily corriere del Ticino fumes: » more
In the event that Athens' creditors extend the deadline for Greece to implement the agreed reforms it would need an estimated 13 to 15 billion euros more than previously assumed. According to Finance Minister Yannis Stournaras, Greece wants to close the financing gap without further burdening European taxpayers. This is the consequence of a relaxed monetary policy, the liberal daily corriere del Ticino fumes: hold out a finger to the debtor countries and they'll grab the whole hand: "No sooner has the ECB announced supportive purchases than Athens is knocking at the door for the next deferral. Portugal wants more time as well, while Spain, which looked poised to apply for additional help, is now hesitating [for fear of the conditions that would be imposed], and in Italy, too, a growing number of voices are calling for less rigorous budget reorganisation. Should these countries continue on the course of deferral and watering-down, they would be committing another grave mistake. ... Berlin - as primary representative of the austerity course in Europe - would for its part be committing a mistake if it granted the requests of the ailing countries."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Greece
All available articles from » Lino Terlizzi
Corriere del Ticino - Switzerland | Friday, 21. September 2012
The ECB, the US's Federal Reserve and the Bank of Japan have all recently decided to pump large amounts of money into their economies to overcome the crisis. But only the major financial players benefit from this monetary policy, the liberal daily Corriere del Ticino laments: » more
The ECB, the US's Federal Reserve and the Bank of Japan have all recently decided to pump large amounts of money into their economies to overcome the crisis. But only the major financial players benefit from this monetary policy, the liberal daily Corriere del Ticino laments: "In truth this form of monetary policy is not neutral and doesn't benefit the weak social classes. The flood of money rewards the banks, which can then finance themselves at cheap interest, the major financial companies, which can speculate with cheap capital, and the indebted economic agents. … The man on the street, the careful saver, on the other hand, is punished. … Moreover this monetary policy encourages new speculative bubbles without having a positive impact on the real economy and without creating the conditions for solid growth. Consequently this is just another experiment that will hardly tackle one of the main problems of the crisis: the unequal distribution of income."
» to the homepage (external link, Corriere del Ticino)
More from the press review on the subject » Financial Markets, » Banks, » Global
All available articles from » Alfonso Tuor
Dziennik Gazeta Prawna - Poland | Tuesday, 18. September 2012
The financial markets have risen by six percent since the ECB's decision in favour of unlimited purchases of government bonds. In the long term, however, the euro countries won't be able to avoid painful reforms, Ryszard Petru, president of the Polish Economists' Association TEP warns in an opinion piece for the conservative daily Dziennik Gazeta Prawna: » more
The financial markets have risen by six percent since the ECB's decision in favour of unlimited purchases of government bonds. In the long term, however, the euro countries won't be able to avoid painful reforms, Ryszard Petru, president of the Polish Economists' Association TEP warns in an opinion piece for the conservative daily Dziennik Gazeta Prawna: "While the politicians are implementing their measures only hesitantly and incorrectly, ECB chief Mario Draghi is currently the only one who feels responsible for the entire Eurozone. But with his plan Draghi has merely bought time and a short-term solution to the problem of the affected countries, namely the high yields on their government bonds. ... Ultimately these measures are not sustainable. These countries still have high budget deficits. And even the most avid supporters of this type of intervention have always stressed that Draghi has simply given politicians more time for their reforms. We still don't know exactly how much more time we have or at what price. It would be interesting to know whether Europe's politicians are at all aware of this."
» more information (external link, Polish)
More from the press review on the subject » Financial Markets, » Economy, » Global
All available articles from » Ryszard Petru
Imerisia - Greece | Monday, 10. September 2012
Greece's prospects suddenly look much brighter after the ECB's decision to purchase government bonds, business paper Imerisia writes: » more
Greece's prospects suddenly look much brighter after the ECB's decision to purchase government bonds, business paper Imerisia writes: "The intervention by ECB head Mario Draghi has changed the outlook for Athens. True, it's not a wave of the magic wand that brings us back to 2009, when the crisis hadn't yet started. Nevertheless it is true that the ongoing uncertainty over whether our country would remain in the Eurozone has rendered our situation highly unstable. Now the ECB's measures are aimed at reducing this instability. ... For Draghi, Hollande, Monti and Rajoy, stabilising Greece politically and socially represents an enormous challenge. Because Greece is one small stone in a huge edifice, and if it's removed the entire house could come down."
» full article (external link, Greek)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Greece, » Europe
All available articles from » Giorgos Kapopoulos
Der Spiegel - Germany | Sunday, 9. September 2012
The German Constitutional Court will rule on Wednesday on whether the ESM permanent bailout fund is compatible with the German constitution. But this decision will carry little weight because ECB head Mario Draghi has long since had the last say in Europe, the news magazine Der Spiegel writes, criticising the ambivalent attitude of German Chancellor Angela Merkel: » more
The German Constitutional Court will rule on Wednesday on whether the ESM permanent bailout fund is compatible with the German constitution. But this decision will carry little weight because ECB head Mario Draghi has long since had the last say in Europe, the news magazine Der Spiegel writes, criticising the ambivalent attitude of German Chancellor Angela Merkel: "She supports both the ECB president and his critic [Bundesbank head] Weidmann. Secretly Draghi's programme suits Merkel to a T, because she would fail to attain a majority in the Bundestag for any further euro bailout programmes. That's also why she's saying that the ECB's plans are consistent with its mandate. She could, for example, file a nullity action against the ECB's decision at the European Court of Justice. The Bundestag could also call on the government to take such action by means of a motion for a resolution - forcing it to put its cards on the table. But where there is no plaintiff there can be no judge. And as long as things remain that way, Mario Draghi will continue to be the most powerful man in Europe, unchallenged by courts or parliaments."
» more information (external link, German)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Germany, » Europe
All available articles from » Arnim Mahler
Blog Gavin Hewitt's Europe - United Kingdom | Sunday, 9. September 2012
The ECB's decision to purchase government bonds of ailing euro states gives Spain some much needed extra time, Europe editor Gavin Hewitt writes on his blog for the BBC: » more
The ECB's decision to purchase government bonds of ailing euro states gives Spain some much needed extra time, Europe editor Gavin Hewitt writes on his blog for the BBC: "The key for Madrid is to avoid any rescue that comes with further conditions. The government will fight very hard not to end up with a full bailout programme. The Deputy Minister for Trade, Jaime Garcia Legaz, was making the case that Spain did not need extra help. He said that exports to countries outside the eurozone were growing fast. Wage competitiveness was returning, as was a current account surplus. There was, in his view, enough good news to justify a pause before seeking a rescue. This is an important moment in the eurozone crisis. The ECB has played its strongest card. It will certainly buy time. It should be remembered, however, that the eurozone economy will deteriorate further in the months ahead and that will once again challenge most of the assumptions that a corner has been turned."
» full article (external link, English)
More from the press review on the subject » Financial Markets, » Economy, » Spain, » Europe
All available articles from » Gavin Hewitt
Main focus of Friday, 7. September 2012
The ECB decided on Thursday to help financially weakened euro countries with unlimited purchases of government bonds provided the latter submit to the terms imposed ... » more
The ECB decided on Thursday to help financially weakened euro countries with unlimited purchases of government bonds provided the latter submit to the terms imposed by the euro bailout fund. Advocates of the decision express delight that an EU institution is finally taking an effective measure against the debt crisis. Critics say the ECB is rewarding unstable economies and overstepping its competencies to an unacceptable extent.
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Europe
Jornal de Negócios - Portugal | Friday, 7. September 2012
Mario Draghi has finally pulled out the heavy ammunition, the liberal business daily Jornal de Negócios comments, praising the ECB president: » more
Mario Draghi has finally pulled out the heavy ammunition, the liberal business daily Jornal de Negócios comments, praising the ECB president: "Yesterday trumpets could be heard. There were celebrations. … What the ECB has done it has done well. Today, still hung-over from the party, it returns to the front. The austerity dictate continues. The war is still being fought, but the generals have now deployed the heavy artillery. The experience of several years of frustration urges caution in our analyses, particularly since there are still plenty of uncertainties. … The good news is that perhaps things won't get worse. The financial markets will finally have a counterweight on the market: the bottomless reserves of the ECB. … For Portugal this could be excellent news. … Grazie Mario, for doing what others neglect to do: your duty!"
» more information (external link, Portuguese)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Portugal, » Europe
All available articles from » Pedro Santos Guerreiro
Il Sole 24 Ore - Italy | Friday, 7. September 2012
Finally the ECB is putting the euro on a solid foundation, the liberal-conservative business paper Il Sole 24 Ore writes but warns that the stringent terms of the rescue programmes could have a paralysing impact on economies - which would play right into the hands of the programme's only detractor: » more
Finally the ECB is putting the euro on a solid foundation, the liberal-conservative business paper Il Sole 24 Ore writes but warns that the stringent terms of the rescue programmes could have a paralysing impact on economies - which would play right into the hands of the programme's only detractor: "Draghi yesterday not only redressed the failures of the past three years in European policy, he also laid a new foundation for giving the single currency a more solid structure and a credible and stable future. ... Now it's up to the governments to act. … But paradoxically, now that the situation has relaxed, the crisis states are reluctant to use the European safety net for fear of the harsh conditions attached. Perhaps however it was the intention all along to threaten to put the ailing states under European supervision, so as to move them to make the necessary reforms and budgetary adjustments. … In the end this was precisely Germany's hope: that it would be able to spare itself the expense of boosting the bailout fund by forcing austerity on its partners."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Germany, » Europe
All available articles from » Adriana Cerretelli
Süddeutsche Zeitung - Germany | Friday, 7. September 2012
A euro community based on repeated breaches of agreement is built on precarious foundations, warns the left-liberal Süddeutsche Zeitung in the wake of the ECB's decision: » more
A euro community based on repeated breaches of agreement is built on precarious foundations, warns the left-liberal Süddeutsche Zeitung in the wake of the ECB's decision: "Saving the euro at any price could spell economic disaster; this is one red line that must not be crossed. The other is the legal boundary: in a community based on law it may never be said that the end justifies all means. ... The history of the past three years of euro bailouts is a history of breaches of contract - and now things are to continue along the same lines? Above all it is unacceptable for the ECB to impose itself as a secret, or more precisely a sinister ruler in Europe. It cannot and should not be tolerated that an institution with no democratic legitimacy decides over living conditions in Europe, or that ultimately it will be irrelevant how the German Constitutional Court rules next week or what the Bundestag decides. The thought that the ECB will simply print more money if the rulings and laws don't suit is simply unbearable."
» more information (external link, German)
More from the press review on the subject » EU Policy, » Europe
All available articles from » Marc Beise
La Vanguardia - Spain | Friday, 7. September 2012
ECB chief Draghi made clear on Thursday that the European Central Bank will only purchase the bonds of struggling countries that submit to the stringent controls of the European bailout fund. But what happens if states fail to fulfil their obligations is unclear, the liberal daily La Vanguardia notes: » more
ECB chief Draghi made clear on Thursday that the European Central Bank will only purchase the bonds of struggling countries that submit to the stringent controls of the European bailout fund. But what happens if states fail to fulfil their obligations is unclear, the liberal daily La Vanguardia notes: "There are important aspects to be clarified. For example the question of what happens with the ECB's purchases if a country that has benefited from them doesn't adhere to the terms. Or if it is incapable of normalising its financial situation. Draghi would then be obliged to close the tap (as he pledged yesterday), which would renew doubts about a collapse of the euro. Or he must relax the terms. This is a question that will have to be tackled later on once it's clear whether the ECB's plan will be enough to resolve the Eurozone crisis."
» full article (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Europe
Libération - France | Friday, 7. September 2012
The rescue of the euro can finally get underway, the left-liberal daily Libération writes jubliantly in the wake of the ECB's decision: » more
The rescue of the euro can finally get underway, the left-liberal daily Libération writes jubliantly in the wake of the ECB's decision: "For four years the euro rescue has resembled a trailer for a film that's never released. So often promised and programmed, it has been postponed again and again. It's not clear whether posterity will remember September 6, 2012, but it is certainly possible. In Frankfurt it was not a 'black Thursday' but a day of hope, or rather of immense relief. ... In economics it's the central banks that have the greatest dissuasive force. But they have to want to make use of it. This time the message is clear: Anyone who speculates 'without good reason' against a member of the Eurozone will suffer immediate losses. The single currency is no longer protected merely by a barricade of paper, but by a financial power equipped with almost nuclear capacities!"
» full article (external link, French)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Europe
All available articles from » Vincent Giret
Hospodárske noviny - Slovakia | Friday, 7. September 2012
If the ECB steps in to help poorly managed economies it will have nothing to do with the market economy, the business paper Hospodárske writes: » more
If the ECB steps in to help poorly managed economies it will have nothing to do with the market economy, the business paper Hospodárske writes: "'Do as you like, and if it goes wrong we'll help you out', is how the ECB's decision could be interpreted. The markets' reaction was only logical: general rejoicing and soaring share prices. ... Draghi's decision may help to calm the situation in the Eurozone. After all, plenty of people had complained that neither the politicians nor the ECB were taking action against the crisis. ... Countries like Slovakia however, which are thrifty and comparatively responsible in their economic management, could get the feeling that they've been betrayed by the ECB. People like to say that capitalism and the market economy are synonyms. But when the financial markets punish irresponsible countries and the ECB rushes to their aid, a free market economy is nothing but a dream."
» more information (external link, Slovak)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Slovakia, » Europe
All available articles from » Ivan Szabó
Politiken - Denmark | Friday, 7. September 2012
The unlimited purchase of the bonds of distressed countries will merely give the Eurozone a reprieve, the left-liberal daily Politiken writes, calling on the euro states to take resolute action: » more
The unlimited purchase of the bonds of distressed countries will merely give the Eurozone a reprieve, the left-liberal daily Politiken writes, calling on the euro states to take resolute action: "Above all one must remember that 'Super Mario' may be able to save the euro in the long run, but not the European economy, which is currently in a profound recession. To save the economy Europe's politicians must turn their attention to growth rather than austerity. And for Europe the prospects are dismal in this respect. Europe, including [non-euro] Denmark, is caught up in a vicious circle that is only worsening with the never-ending austerity plans. It will take supermen and superwomen who take new steps for the economy to begin growing again. Unfortunately so far nothing has been seen of such leadership qualities."
» full article (external link, Danish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Europe
Večer - Slovenia | Friday, 7. September 2012
The ECB's decision will only increase the suffering of those living in the crisis states, the daily Večer contends: » more
The ECB's decision will only increase the suffering of those living in the crisis states, the daily Večer contends: "Bank bosses and speculators have been given new fuel to continue their game. Of course Mario Draghi didn't say that at the end of the meeting. But he did point out that the people of the countries whose bonds the ECB will purchase will have to put up with even harsher austerity measures. ... The money press will work at full tilt to produce new euro bills which will line the pockets of the top bankers and speculators. Businesses that should actually be creating new jobs will cut production and lay off staff. Unemployment and poverty will increase among the masses - and with them the danger of a social time bomb."
» full article (external link, Slovenian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Europe
All available articles from » Darja Kocbek
Diário de Notícias - Portugal | Thursday, 6. September 2012
With a sense of anticipation the liberal-conservative daily Diário de Notícias looks forward to the ECB governing council's meeting today, noting that massive market intervention may be approved against powerful Germany's will: » more
With a sense of anticipation the liberal-conservative daily Diário de Notícias looks forward to the ECB governing council's meeting today, noting that massive market intervention may be approved against powerful Germany's will: "As always the expectations are exaggerated. … But there is a reason for this. … Germany is using all its political and economic power to oppose an overly lax and pro-inflationary course at an ECB that it considers too 'politicised'. The purchase of the bonds of ailing euro states by the ECB is a horror scenario in the Germans' eyes. … And also on the subject of a banking union the path forward seems blocked because Merkel and [German Finance Minister Wolfgang] Schäuble don't want to give the ECB the power to supervise all the banks in Europe. … Yes, Germany wants more Europe and a better Europe, but it wants that Europe to be moulded according to its own rules - rules which it applied to itself rigorously before the global crisis. And it is pressing ahead with the increasingly apparent success of a state that will emerge strengthened from this crisis and which intends to impose its rules on the others even against their will."
» full article (external link, Portuguese)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Banks, » Germany, » Europe
Main focus of Wednesday, 5. September 2012
The ECB's Governing Council meets on Thursday to discuss plans for further bond-buying by the Bank aimed at relieving the pressure of high yields on ... » more
The ECB's Governing Council meets on Thursday to discuss plans for further bond-buying by the Bank aimed at relieving the pressure of high yields on crisis-stricken euro countries. Some commentators call for the ECB to purchase bonds directly from the states in question. Others doubt that such measures will alleviate the crisis in the long term.
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Europe
Süddeutsche Zeitung - Germany | Wednesday, 5. September 2012
Past experience has already shown that ECB intervention can't provide a lasting solution to the crisis, the left-liberal daily Süddeutsche Zeitung points out, arguing against the financing of government bonds: » more
Past experience has already shown that ECB intervention can't provide a lasting solution to the crisis, the left-liberal daily Süddeutsche Zeitung points out, arguing against the financing of government bonds: "Yes, the ECB can put as much money in circulation as it wants to at the touch of a button. But no, so far even the special privilege of printing money has hardly helped at all. So now for the next attempt. … The freshly printed money carries certain risks. For one thing there's the danger of inflation; the many millions drive up prices. Then there's the danger of losses, if for instance Italy left the Eurozone the ECB would be left sitting on a pile of government bonds with a high risk of default. The [German] taxpayer is liable for this to the tune of 27 percent. Has the Bundestag voted in this? No. … If the politicians want to save the Eurozone they should do it themselves, after consulting the people. There are a number of possibilities, from the introduction of euro bonds to a debt settlement pact. The ECB joker is tempting but it's easy to forget that it doesn't pay off in the long term."
» more information (external link, German)
More from the press review on the subject » EU Policy, » Germany, » Italy, » Europe
All available articles from » Markus Zydra
Avvenire - Italy | Wednesday, 5. September 2012
The prospect of supportive purchases by the ECB stoked up demand for Spanish and Italian short-term bonds, causing a marked drop in the yields. The reaction of the financial markets is proof that ECB boss Mario Draghi would do well to adhere to his bond-buying programme, the Catholic daily Avvenire writes, arguing that the purchases should not be confined to the secondary market: » more
The prospect of supportive purchases by the ECB stoked up demand for Spanish and Italian short-term bonds, causing a marked drop in the yields. The reaction of the financial markets is proof that ECB boss Mario Draghi would do well to adhere to his bond-buying programme, the Catholic daily Avvenire writes, arguing that the purchases should not be confined to the secondary market: "For both options under discussion [bond buying with and without an upper limit on yields], the financial resources of the ECB could prove to be extremely expensive and exhausting on the secondary market. ... In our opinion the best proposal is to buy Spanish and Italian bonds at a fixed interest rate on the primary market and keep them for a set period of time (perhaps two years?). An obligation that becomes void as soon as either of the two countries fails to fulfil the terms regarding budgetary discipline and economic incentives. This strategy firstly requires fewer resources and secondly considerably reduces the risk of loss of capital for the ECB."
» more information (external link, Italian)
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Italy, » Spain, » Europe
All available articles from » Leonardo Becchetti
ABC - Spain | Wednesday, 5. September 2012
The ECB is due to state its position on the purchase of government bonds on Thursday while on the same day German Chancellor Angela Merkel travels to Madrid. This will be a crucial day for Europe's future, the conservative daily ABC notes, but doubts that any truly important decisions will be made: » more
The ECB is due to state its position on the purchase of government bonds on Thursday while on the same day German Chancellor Angela Merkel travels to Madrid. This will be a crucial day for Europe's future, the conservative daily ABC notes, but doubts that any truly important decisions will be made: "Will the future not just of Spain but all Europe be decided this Thursday in Madrid and Frankfurt? It should be, but in Europe things tend to move very slowly - too slowly, one could say, and many dates that were considered crucial have come to nothing. … In Madrid Merkel will doubtless want to help her Spanish counterpart Rajoy, whose efforts she has acknowledged. But there are no friendships in politics, just interests, and Merkel must defend above all her own interests. Even though we will no doubt hear an abundance of amiable phrases from the two, there's no guarantee that any concrete action will be taken. So it could be that we're no closer to a solution on Friday than we are today."
» more information (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Germany, » Spain, » Europe
All available articles from » José María Carrascal
Delo - Slovenia | Tuesday, 4. September 2012
ECB chief Mario Draghi will announce details of the assistance to be given to crisis-stricken euro states this Thursday. The daily Delo stresses the need for such measures but remains dubious in view of the imminent ruling of Germany's Constitutional Court on the ESM and the fiscal compact: » more
ECB chief Mario Draghi will announce details of the assistance to be given to crisis-stricken euro states this Thursday. The daily Delo stresses the need for such measures but remains dubious in view of the imminent ruling of Germany's Constitutional Court on the ESM and the fiscal compact: "Europeans can only hope that the current heated debates produce solution that will prevent the current bank crises from turning into state crises. … Boosting economic growth is part of the solution, however this time on a solid foundation. … Yet Europe is also afraid of the possibility that the German Constitution Court won't approve the European stability mechanism in a week's time. This would torpedo Draghi's plans to use the bailout fund and the ECB's backing to reduce the yields on government bonds."
» full article (external link, Slovenian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Germany, » Europe
All available articles from » Barbara Kramzar
Cinco Días - Spain | Wednesday, 29. August 2012
Jörg Asmussen, the German representative on the ECB's executive board, on Monday stressed the bank's willingness to embark on further government bond purchases, thus contradicting the position of Bundesbank head Jens Weidmann. This difference of opinions among Germany's central bankers will give ECB President Mario Draghi more leeway, the left-liberal business paper Cinco Días predicts: » more
Jörg Asmussen, the German representative on the ECB's executive board, on Monday stressed the bank's willingness to embark on further government bond purchases, thus contradicting the position of Bundesbank head Jens Weidmann. This difference of opinions among Germany's central bankers will give ECB President Mario Draghi more leeway, the left-liberal business paper Cinco Días predicts: "Free at last. Less than a year after he was appointed ECB head Mario Draghi can now finally begin the second phase of his mandate: the realisation of his plan to go on a big government bond shopping spree. At next week's meeting of the executive board he will no longer come up against a united front of the German representatives. This will give his plans greater credibility. And in the long run it will give Draghi a free hand to improve the functioning of the ECB. … Asmussen's support is important because it undermines Weidmann's opposition, reducing it to just one opinion among many rather than the united stance of the most important member of the Eurozone."
» full article (external link, Spanish)
More from the press review on the subject » Fiscal Policy, » Banks, » Germany, » Europe
La Repubblica - Italy | Tuesday, 28. August 2012
At the meeting of the ECB Council on September 6 the purchase of government bonds by the central bank will be the main point on the agenda, as the German member of the ECB's executive board of directors, Jörg Asmussen, announced on Monday. German Bundesbank president Jens Weidmann opposes this programme, which is backed by ECB head Mario Draghi. The Bundesbank's resistance could cost the Eurozone dearly, the left-liberal daily La Repubblica fears: » more
At the meeting of the ECB Council on September 6 the purchase of government bonds by the central bank will be the main point on the agenda, as the German member of the ECB's executive board of directors, Jörg Asmussen, announced on Monday. German Bundesbank president Jens Weidmann opposes this programme, which is backed by ECB head Mario Draghi. The Bundesbank's resistance could cost the Eurozone dearly, the left-liberal daily La Repubblica fears: "For a months now the Bundesbank has been bombarding the main headquarters of the ECB in Frankfurt with all the ammunition put at its disposal by the media. Yet one gets the impression - in Germany too - that rather than an open war this is more like a barrage aimed at refining the ECB's strategy in order to limit bond purchases. Because Weidmann lost the decisive battle at the beginning of August when the ECB Council approved the principle of ECB intervention on the financial markets against his will. … However if instead of using the 'big bazooka' the ECB confines itself to an urban guerilla-style strategy of individual purchases, it could be both expensive and almost ineffective."
» more information (external link, Italian)
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Banks, » Germany, » Europe
All available articles from » Maurizio Ricci
El País - Spain | Thursday, 23. August 2012
Financial investor Nicolas Berggruen, Pimco CEO Mohamed A. El-Erian and economist Nouriel Roubini warn in the left-liberal daily El País of the consequences of an uncontrolled collapse of Europe's single currency: » more
Financial investor Nicolas Berggruen, Pimco CEO Mohamed A. El-Erian and economist Nouriel Roubini warn in the left-liberal daily El País of the consequences of an uncontrolled collapse of Europe's single currency: "If the Eurozone totally fragments, Europe also fails as the single market and the European Union may also collapse. In the short run, fragmentation would be the economic and financial equivalent of a cardiac arrest for Europe. Cross-border flows of goods, services and capital would be disrupted as currency denomination concerns overwhelm the normal valuation calculus. ... Germany and the core need to decide boldly whether they believe that the Eurozone can survive and in what format. If the answer is yes, then the pursuit of a less imperfect union would need to be accompanied by massive official financing - both fiscal and from the European Central Bank. ... If, instead, they were to decide both that the eurozone is not viable as is and that a smaller union is not achievable, the costs of breaking up disorderly later rather than breaking up now would be much larger."
» full article (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Europe
All available articles from » Nicolas Berggruen, » Mohamed A. El-Erian, » Nouriel Roubini
Il Sole 24 Ore - Italy | Tuesday, 21. August 2012
According to a report in the German news magazine Der Spiegel, the ECB is considering setting limits on the yields for the bonds of highly indebted Eurozone countries. The German government has described the plan as problematic. Germany would certainly be entitled to have its say on the potential setting of an upper limit on yields, the liberal-conservative business paper Il Sole 24 Ore writes: » more
According to a report in the German news magazine Der Spiegel, the ECB is considering setting limits on the yields for the bonds of highly indebted Eurozone countries. The German government has described the plan as problematic. Germany would certainly be entitled to have its say on the potential setting of an upper limit on yields, the liberal-conservative business paper Il Sole 24 Ore writes: "Whether the talk is of limits on yields or other solutions, Berlin won't give Draghi a free hand in this. The last thing Berlin would allow is a covert return to the exchange rate mechanism of the old European monetary system, in which not the national central banks but the ECB intervenes. An agreement on regulating yields is imperative if the Eurozone is to survive. But this doesn't mean for Italy and Spain that the worst is over. On the contrary, to silence the hardliners in Germany and negotiate a sensible level of yields Italy and Spain must go further than fulfilling the current agreements and do more in terms of balancing their budgets, privatisation and debt reduction."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Germany, » Italy, » Spain
All available articles from » Alessandro Plateroti
Cinco Días - Spain | Friday, 17. August 2012
The Spanish share index, the Ibex, rose to 7.417 points on Thursday while the yields on Spanish bonds dropped considerably. The markets are clearly acting on the assumption that Spain will soon seek a bailout, the business paper Cinco Días concludes: » more
The Spanish share index, the Ibex, rose to 7.417 points on Thursday while the yields on Spanish bonds dropped considerably. The markets are clearly acting on the assumption that Spain will soon seek a bailout, the business paper Cinco Días concludes: "Slowly but surely the market has begun to send out positive signals regarding Spain's sovereign debt. The reason for this is the growing conviction among investors that Spain will request help from Europe to cover the costs of its public debt. This was the precondition stipulated by ECB chief Mario Draghi at the beginning of August for the ECB to continue purchasing Spanish bonds. … And since then the conviction that the government will soon request assistance from its European partners and that the ECB will then proceed to make massive purchases of Spanish bonds has gained ground."
» full article (external link, Spanish)
More from the press review on the subject » Financial Markets, » Banks, » Economy, » Spain, » Europe
Blog EUROPP - United Kingdom | Thursday, 16. August 2012
ECB head Mario Draghi and Italy's Prime Minister Mario Monti have repeatedly argued for the quick implementation of a European banking and fiscal union. But this could force the crisis countries into a blatant state of dependency, Antonio Lettieri fears in the blog EUROPP of the London School of Economics: » more
ECB head Mario Draghi and Italy's Prime Minister Mario Monti have repeatedly argued for the quick implementation of a European banking and fiscal union. But this could force the crisis countries into a blatant state of dependency, Antonio Lettieri fears in the blog EUROPP of the London School of Economics: "The governments of Spain and Italy may be secured from speculation, but they have had to apply for aid from the European rescue Funds. Following their request, European Governments ... will establish the conditionality and tools to monitor their implementation. In essence, two out of four major founding countries of the Euro will be put under receivership. To sweeten the potion, this will be considered as a step towards a fiscal union and an anticipation of the European Political Union. This is a strange perspective of Union, one that is hard to sell to the people, as it looks more like a process by which some countries will be subjecting the others into a semi-colonial condition. ... Germany can take steps to dismiss governments in distressed countries, reducing them to a semi-colonial condition, but cannot accept any doubt about the sovereignty of the German Parliament and the Constitutional Court itself."
» more information (external link, English)
More from the press review on the subject » EU Policy, » Economy, » United Kingdom
The Economist - United Kingdom | Tuesday, 14. August 2012
The inflation policy of the European Central Bank is also to blame for the impending recession in the Eurozone, Ryan Avent argues in the blog of the liberal weekly The Economist: » more
The inflation policy of the European Central Bank is also to blame for the impending recession in the Eurozone, Ryan Avent argues in the blog of the liberal weekly The Economist: "The ECB has permitted this dangerous slowdown because it focuses obsessively on inflation, and consumer price inflation has been above 2% since late 2010. That's a potentially fatal error. Plummeting demand will eventually bring inflation down, at the cost, perhaps, of unsustainably painful contractions around the periphery. Meanwhile, the ECB's choice to preside over a steady slowdown in demand growth, and a consequent squeeze on the periphery, is exacerbating the financial crisis and putting great pressure on ECB officials to take all sorts of extraordinary action. The inflation obsession is leaving the central bank more involved in the economy and more politically overextended than it would be if it focused on maintaining stable growth in demand."
» full article (external link, English)
More from the press review on the subject » EU Policy, » Economy, » Europe
All available articles from » Ryan Avent
La Repubblica - Italy | Friday, 10. August 2012
In a report published on Monday the European Central Bank warned about the dangers of high yields on government bonds in the Eurozone and signalled its willingness to intervene. The ECB is bluffing, the left-liberal daily La Repubblica complains: » more
In a report published on Monday the European Central Bank warned about the dangers of high yields on government bonds in the Eurozone and signalled its willingness to intervene. The ECB is bluffing, the left-liberal daily La Repubblica complains: "With its monthly report the ECB is more or less openly telling Italy and Spain to apply for help from the bailout fund before it executes its bond purchasing plans. In doing so the ECB is basically tying its assistance to intergovernmental agreements in which it has no say. This approach would have the paradoxical effect of rendering any intervention by the ECB ineffectual. Because the Eurotower [the ECB headquarters] will only take action in an emergency, once the countries are already with their backs to the wall and have lost their credibility on the markets. So it seems the ECB is secretly hoping that the countries in question won't apply for bailouts and that the announcement of its willingness to help will suffice. The ECB is testing the impact of this bluff."
» more information (external link, Italian)
More from the press review on the subject » Fiscal Policy, » Italy, » Spain
All available articles from » Tito Boeri
El País - Spain | Wednesday, 8. August 2012
The president of the Bundesbank, Jens Weidmann, was the only member of the ECB Governing Council to vote against the Central Bank purchasing more government bonds. The left-liberal daily El País condemns this as stubbornly clinging to theories that ignore reality: » more
The president of the Bundesbank, Jens Weidmann, was the only member of the ECB Governing Council to vote against the Central Bank purchasing more government bonds. The left-liberal daily El País condemns this as stubbornly clinging to theories that ignore reality: "No one doubts that the economic state of affairs is desolate, not even Weidmann and the Bundesbank. However Weidmann and the Bundesbank are almost the only ones who continue to claim that the desolation of the present economic situation doesn't call for a change of direction. ... To accept this change would be to admit that an empirical observation as glaring as the ruin of Greece, Ireland and Portugal, which may soon be followed by that of Spain and Italy and perhaps even all Europe, should weigh more heavily than the theoretical speculation about allowing the European Central Bank to play too great a role in solving the crisis. For all economists who think like Weidmann and the Bundesbank, a world in which economic decisions were a response to the coarse stimulus of facts rather than the sterile demands of theory would be an upside-down world."
» full article (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Germany, » Europe
All available articles from » José María Ridao
De Tijd - Belgium | Friday, 3. August 2012
With his catastrophic communication policy Draghi has gambled away the ECB's credibility, the liberal daily De Tijd criticises: » more
With his catastrophic communication policy Draghi has gambled away the ECB's credibility, the liberal daily De Tijd criticises: "What got into Draghi? Does he really think that he can get away with telling investors - those of London City, mind you - that 'whatever it takes' will be done to save the euro one week, only to go back on his words the next? Someone has to tell this Italian that investors are a very excitable bunch. By making promises in London that he couldn't keep, Draghi has destroyed the credibility of the ECB. And that's a bad thing. ... The yields on Spanish bonds rose to 7.17 percent yesterday as a result of Draghi's blunder. Draghi will no doubt find this highly irrational once more. But faced with such wretched communication skills it's entirely rational that the investors are running scared."
» full article (external link, Dutch)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Europe
All available articles from » Kurt Vansteeland
Corriere della Sera - Italy | Friday, 3. August 2012
ECB chief Draghi does well to make countries take their fate into their own hands, writes the liberal-conservative daily Corriere della Sera: » more
ECB chief Draghi does well to make countries take their fate into their own hands, writes the liberal-conservative daily Corriere della Sera: "With their downhill run the markets are punishing Draghi for not keeping his promise. But the markets are wrong. ... An unlimited ECB aid programme for Italy and Spain of the kind Paul Krugman and many other experts around the globe are calling for would be in contradiction of the EU treaties. ... Unconditional ECB support would also torpedo the debt ceiling that the countries in question have agreed to under the pressure of rising borrowing costs. Because political Europe stubbornly refuses to act jointly in the crisis, the power of decision Draghi lays claim to has advantages that may be rewarded by less jittery financial markets. Firstly, he is leaving all the doors open to the ECB and secondly, he is reminding the political leaders of a key truth: saving the euro depends not just on the ECB but also on the governments and their voters."
» more information (external link, Italian)
More from the press review on the subject » Fiscal Policy, » Europe
All available articles from » Francesco Daveri
Diário Económico - Portugal | Friday, 3. August 2012
It was dishonest of Draghi not to make good on what he had pledged last week, in the eyes of the liberal business paper Diário Económico: » more
It was dishonest of Draghi not to make good on what he had pledged last week, in the eyes of the liberal business paper Diário Económico: "He began by saying that he would do whatever it took to save the euro, but then he did nothing. ... How normal this has become at the EU institutions: first they study the problem then wait and see what happens. ... The markets don't like encoded messages or people who say one thing and then do another. But this is precisely the way the EU politicians do things: declarations of love for the euro but nothing to back them up. ... The credibility of the EU institutions has been destroyed. This ECB decision was clearly influenced by pressure from Germany and once again Germany's orthodox financial approach has won the day. ... As far as Germany is concerned it would be a sacrilege for the ECB to buy bonds. Draghi wanted to take this path, but has pulled back. Now the bank will only intervene after crisis countries ask the fund for help."
» full article (external link, Portuguese)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Portugal, » Europe
All available articles from » Bruno Proença
El País - Spain | Friday, 3. August 2012
The ECB has indicated that it is willing to buy massive amounts of government bonds of crisis countries - but only once they have officially applied for help. This decision will have major repercussions for Spanish society, the left-liberal daily El País fears: » more
The ECB has indicated that it is willing to buy massive amounts of government bonds of crisis countries - but only once they have officially applied for help. This decision will have major repercussions for Spanish society, the left-liberal daily El País fears: "For Spain, the consequences are clear. Now that the door of direct intervention by the ECB has closed, the government will have to think about applying for help from the bailout fund and when the best time to do so would be. … After the banking rescue the government insisted that the Spanish economy wouldn't need a second bailout. But now the conditions for refinancing Spain's debt make it seem inevitable that the government will have to apply for help from the ECB, breaking yet another of its emphatic promises. ... It's difficult to avoid the perception that the single currency will be maintained at the expense of draconian measures in Spain and Italy, with unforeseeable consequences for society."
» full article (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Italy, » Spain, » Europe
Financial Times Deutschland - Germany | Friday, 3. August 2012
It was a wise move by ECB chief Mario Draghi to present a roadmap for the purchase of European government bonds, writes the liberal business paper Financial Times Deutschland, hoping that Germany won't thwart his strategy: » more
It was a wise move by ECB chief Mario Draghi to present a roadmap for the purchase of European government bonds, writes the liberal business paper Financial Times Deutschland, hoping that Germany won't thwart his strategy: "Just harmony then? That would have been nice, so as not to compromise the psychological impact of Draghi's announcement. But it met with resistance from Germany, yet again from the head of the Bundesbank, Jens Weidmann, who it seems was the only one in the ECB Governing Council to vote against Draghi's plan. But not only Draghi's nose is out of joint. It is indeed unwise to break the ranks of the Governing Council in this situation. Weidmann is fanning mistrust where he should be fostering confidence, the central bank's main goal in the summer break. ... Now it depends on how Weidmann acts in the weeks to come. If he torpedoes the plan, he will erode the credibility of the entire initiative. And hopes for even a halfway calm late summer on the markets will be dashed."
» full article (external link, German)
More from the press review on the subject » EU Policy, » Europe
Il Sole 24 Ore - Italy | Thursday, 2. August 2012
Given the incompetence of the governments in managing the euro crisis, the ECB must assume a key role, a course of action that is not without its risks, writes the liberal-conservative business paper Il Sole 24 Ore: » more
Given the incompetence of the governments in managing the euro crisis, the ECB must assume a key role, a course of action that is not without its risks, writes the liberal-conservative business paper Il Sole 24 Ore: "Compared with the indecision, slowness and dilettantism displayed by national governments, the ECB's professionalism and credibility is impressive. This is why we must now put our last hopes in the Eurotower in Frankfurt. Placing unconditional trust in the ECB is however not without its risks. Expecting a single meeting to decide everything is dangerous and could turn into a test of nerves for the institution and its credibility. All too often in this crisis we have seen steps announced only to be retracted in the ensuing press conference. But this time there's no going back. And Mario Draghi knows it. ... The main thing is that the ECB council is also clear on the fact that it can't retract a decision with later announcements once it has been made."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Europe
All available articles from » Alessandro Leipold
Diário de Notícias - Portugal | Thursday, 2. August 2012
Greater responsibility in solving the euro crisis is what the liberal-conservative daily Diário de Notícias hopes today's meeting of the ECB governing council will produce: » more
Greater responsibility in solving the euro crisis is what the liberal-conservative daily Diário de Notícias hopes today's meeting of the ECB governing council will produce: "On the table is the proposal to grant the ESM bailout mechanism a banking licence, even though thanks to Germany's constitutional court the mechanism is not even in force yet. ... Its current firing power of 500 billion euros (which can be boosted to a maximum of 700 billion euros) won't be enough if Spain or Italy need help. ... As expected, the German bookkeepers, pointing to the danger of inflation, are against an unlimited euro bailout fund. They should be reminded that inflation is only a potential risk whereas the damage Berlin has done with its austerity dictates is real. Giving the ESM a banking license would only be a temporary solution anyway. The main thing would be to turn the ECB into a proper central bank that doesn't hesitate to use financial instruments when the public welfare is at stake - as is unquestionably the case here."
» full article (external link, Portuguese)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Portugal
All available articles from » Viriato Soromenho-Marques
Süddeutsche Zeitung - Germany | Thursday, 2. August 2012
Germany must finally commit to a concrete strategy for fighting the debt crisis even though it faces a choice between bad and even worse options, writes the left-liberal daily Süddeutsche Zeitung: » more
Germany must finally commit to a concrete strategy for fighting the debt crisis even though it faces a choice between bad and even worse options, writes the left-liberal daily Süddeutsche Zeitung: "Some of these are calculable in euro and cents, some are not, because political costs bear no price tags. A fleeting feeling of national triumph can end in bitter political isolation and a dangerous European political balancing act. ... The really bad option would be the collapse of the European currency system. Whether Greece's exit from the Eurozone is already part of this makes for a splendid debate. ... The bad option involves the intervention of the Central Bank. Since a banking license [for the permanent ESM bailout fund] can only be introduced through contractual changes for which there is neither the time nor the political energy, the ECB will have to intervene directly. Politicians will have to exploit all possible mechanisms to avoid letting the crisis states off the hook when it comes to implementing reforms that are so crucial to Europe's long-term recovery. This however calls for trust among states. The nations of Europe and their leaders should at least be able to come up with that much."
» full article (external link, German)
More from the press review on the subject » EU Policy, » Domestic Policy, » Fiscal Policy, » Germany, » Europe
All available articles from » Stefan Kornelius
La Vanguardia - Spain | Thursday, 2. August 2012
ECB chief Mario Draghi must live up to the high expectations he fuelled last week at the meeting of the governing council today, warns the liberal daily La Vanguardia: » more
ECB chief Mario Draghi must live up to the high expectations he fuelled last week at the meeting of the governing council today, warns the liberal daily La Vanguardia: "The main weapon of the ECB is its credibility. The president of the ECB is therefore obliged today to fulfil the expectations he awakened last week when he said the institution would do whatever it takes to save the euro and that what it does will be enough. All political and economic observers interpreted these words to the effect that the monetary authority is willing to fire up mechanisms to stabilise the debt market and allow reasonable financing for the members of the monetary union, in particular Spain and Italy. Both countries, which are suffering from the distrust of the financial markets, could see their current financing problems worsen to the point where they are unsustainable if Mario Draghi doesn't get a grip on the situation today."
» full article (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Banks, » Italy, » Spain, » Europe
Corriere della Sera - Italy | Wednesday, 1. August 2012
In the run-up to the meeting of the governing council of the European Central Bank this Thursday, the crisis states are expecting not just further cuts in interest rates but also a signal that in future the ECB will purchase the bonds of struggling states. Italy is also putting its hopes in this form of support - which in the liberal-conservative daily Corriere della Sera, economists Alberto Arlesina and Francesco Giavazzi describe as entirely inappropriate: » more
In the run-up to the meeting of the governing council of the European Central Bank this Thursday, the crisis states are expecting not just further cuts in interest rates but also a signal that in future the ECB will purchase the bonds of struggling states. Italy is also putting its hopes in this form of support - which in the liberal-conservative daily Corriere della Sera, economists Alberto Arlesina and Francesco Giavazzi describe as entirely inappropriate: "Central banks can lower interest rates in an effort to ease the credit crunch. But then their task is done. It would be a mistake for them to take the place of governments and buy government bonds for budgetary reasons. Budgetary policies and monetary policy must remain separate. ... Moreover the Central Bank should not forget the lessons of last summer when it began to buy up Italian bonds: the yields on the bonds went down but unfortunately this also destroyed the good reform intentions of the government at the time. ... Our only alternative is to get ourselves out of the mess. We can do it, but it will require resolve on the part of government and parliament."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Italy, » Europe
All available articles from » Alberto Alesina
La Repubblica - Italy | Wednesday, 1. August 2012
The European Central Bank is expected to take an important step in saving the euro on Thursday. Economic Nobel Prize laureate Paul Krugman voices his support in the left-liberal daily La Repubblica for ECB President Mario Draghi and his proposal to purchase government bonds: » more
The European Central Bank is expected to take an important step in saving the euro on Thursday. Economic Nobel Prize laureate Paul Krugman voices his support in the left-liberal daily La Repubblica for ECB President Mario Draghi and his proposal to purchase government bonds: "[P]olicymakers would have to (a) do something to bring southern Europe's borrowing costs down and (b) give Europe's debtors the same kind of opportunity to export their way out of trouble that Germany received during the good years. ... Draghi - who I suspect understands all of this - basically floated the idea of having the central bank buy lots of southern European bonds to bring those borrowing costs down. But over the next two days German officials appeared to throw cold water on that idea. ... The euro can't be saved unless Germany is also willing to accept substantially higher inflation over the next few years - and so far I have seen no sign that German officials are even willing to discuss this issue, let alone accept what's necessary. Instead, they're still insisting, despite failure after failure - remember when Ireland was supposedly on the road to rapid recovery? - that everything will be fine if debtors just stick to their austerity programs. ... For failure of the euro wouldn't just cause economic disruption; it would be a giant blow to the wider European project, which has brought peace and democracy to a continent with a tragic history."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Germany, » Europe
All available articles from » Paul Krugman
Jornal de Negócios - Portugal | Tuesday, 31. July 2012
The criticism levelled by Euro Group boss Jean-Claude Juncker against Berlin's conduct in the euro crisis has provoked a series of fierce counterattacks among the ruling coalition in Germany. This is a dangerous dispute that will only increase doubts about the euro, the business paper Jornal de Negócios warns. "Juncker accused Germany of treating the Eurozone as its subsidiary. … The response was not long in coming: » more
The criticism levelled by Euro Group boss Jean-Claude Juncker against Berlin's conduct in the euro crisis has provoked a series of fierce counterattacks among the ruling coalition in Germany. This is a dangerous dispute that will only increase doubts about the euro, the business paper Jornal de Negócios warns. "Juncker accused Germany of treating the Eurozone as its subsidiary. … The response was not long in coming: Christian social CSU secretary general Alexander Dobrindt described the remark as the height of impertinence. … His party colleague Hans Michelbach criticised ECB chief Draghi, who announced that he would do whatever was necessary to save the euro. … This barrage of public nonsense points to a dangerous trend in the Euro Group. It is reigniting old animosities that the EU project is there to prevent. … The Germans must finally understand that the euro is a now political project, not just a monetary one: the survival of Europe depends upon it. … As things stand now distrust of the euro is only being spurred, and with it the collapse of the EU's economy."
» full article (external link, Portuguese)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Germany, » Europe
All available articles from » Camilo Lourenço
La Repubblica - Italy | Friday, 27. July 2012
An independent intervention by the ECB would allow for a solution to the euro crisis that goes against Angela Merkel without her losing face, the ... » more
An independent intervention by the ECB would allow for a solution to the euro crisis that goes against Angela Merkel without her losing face, the left-liberal daily La Repubblica concludes. "Draghi has apparently received the silent consent of the German leadership, which he can use to break the resistance of the hawks [the hardliners in the euro debate who take the German line]. If the ECB acts independently to deescalate the crisis, which even in Germany no one wants, it allows the chancellor to stick to her principles. This will enable the chancellor to prevent the conflict over how to save the common currency from turning into a full-on clash of governments, someting which was starting to seem inevitable at the last summit and which would mean a loss of face for her."
» to the homepage (external link, La Repubblica)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Germany, » Italy, » Europe
All available articles from » Andrea Bonanni
El País - Spain | Friday, 27. July 2012
After Mario Draghi pledged that the ECB would do whatever it takes to resolve the euro crisis the Spanish share index rose by six percent on Thursday. The left-liberal daily El País asks why the eagerly awaited announcement was so long in coming: » more
After Mario Draghi pledged that the ECB would do whatever it takes to resolve the euro crisis the Spanish share index rose by six percent on Thursday. The left-liberal daily El País asks why the eagerly awaited announcement was so long in coming: "If the mere promise of intervention was enough to halt the downwards spiral of Spanish and Italian bonds why didn't the ECB do it sooner? One broadly accepted explanation is that the bank wanted to punish the [Spanish] government for its poor handling of the financial crisis. But when the punishment started to impact Italy the ECB changed its course, ceding to the governments' demands and putting a stop to the speculation with sovereign debt. Another explanation is that Draghi didn't want to say anything until the bailout package for Spain's banks was in place and the new stability mechanism was in the offing."
» full article (external link, Spanish)
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Banks, » Italy, » Spain, » Europe
Naftemporiki - Greece | Friday, 27. July 2012
Following Mario Draghi's statement the ECB would do whatever it takes to resolve the euro crisis and his vague hints regarding the bank's purchase of government bonds the conservative daily Naftemporiki hopes that he will keep his promise: » more
Following Mario Draghi's statement the ECB would do whatever it takes to resolve the euro crisis and his vague hints regarding the bank's purchase of government bonds the conservative daily Naftemporiki hopes that he will keep his promise: "Draghi has acted as one would expect of a banker of his calibre. … Yesterday can be described as a victory for the defenders of the euro, but in the next few days the markets will test whether Draghi will really make good on his promise. … If the president of the European Central Bank doesn't have the courage and the resolve to either go against the will of leading European politicians or simply act alone, … the dark days will make a surprisingly quick and fulminating comeback and the European Central Bank will lose its credibility and also its ability to change the mood on the markets with a statement."
» full article (external link, Greek)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Greece, » Europe
All available articles from » Nikos Frantzis
Frankfurter Allgemeine Zeitung - Germany | Friday, 27. July 2012
The signals coming from the ECB about buying up government bonds of crisis-stricken countries are a source of concern for the conservative daily Frankfurter Allgemeine Zeitung: » more
The signals coming from the ECB about buying up government bonds of crisis-stricken countries are a source of concern for the conservative daily Frankfurter Allgemeine Zeitung: "It has moved into a grey area in monetary policy - dangerously close to indirect financing of sovereign debt. … It's understandable that the markets are celebrating. They are desperately seeking buyers for these risky bonds. Draghi may hope that the announcement will be enough to bring down the high yields. But how often have we seen both verbal and concrete interventions fall flat. Even Draghi's own "big Bertha", a three-year financing for banks, had only a fleeting impact. Draghi has shown that he's capable of anything. If the crisis continues to escalate he could quite conceivably fly in the face of Germany's euro protectors, think up a new name for a canon and intervene with full force. But this wouldn't solve the debt crisis. Only the states can do that by putting their budgets on the path to recovery and making their economies more competitive."
» full article (external link, German)
More from the press review on the subject » EU Policy, » Europe
All available articles from » Philip Plickert
eldiario.es - Spain | Wednesday, 25. July 2012
Despite the efforts of the Spanish government the ECB so far has not intervened to lower the rising yields on Spanish bonds. An economist using the pseudonym S. Horse warns in the Zona Crítica blog published by new online newspaper eldiario.es of the dangers of applying for a bailout prematurely: » more
Despite the efforts of the Spanish government the ECB so far has not intervened to lower the rising yields on Spanish bonds. An economist using the pseudonym S. Horse warns in the Zona Crítica blog published by new online newspaper eldiario.es of the dangers of applying for a bailout prematurely: "Because the ECB is not intervening, Spain no longer has many options. And the ones it has are all complicated. One option would be to apply for a 'total bailout', as Portugal, Ireland and Greece have done. Another would be to exit the euro. … If we asked the people which of these two approaches represented the lesser evil, they would choose the former. In principle I agree, however, with one reservation: even if we applied for the bailout today, we may still be forced to leave the Eurozone in the near future. And that would be the worst option. … We would have to take out all our loans in euros. And we would have to pay them back in euros, too - no matter which currency we ended up with."
» full article (external link, Spanish)
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Banks, » Spain, » Europe
All available articles from » S. Horse
El Mundo - Spain | Tuesday, 24. July 2012
There is no reason why Spain should still be under such pressure from the financial markets after its government implemented the recent austerity package, according to the conservative daily El Mundo, which calls for the ECB to step in: » more
There is no reason why Spain should still be under such pressure from the financial markets after its government implemented the recent austerity package, according to the conservative daily El Mundo, which calls for the ECB to step in: "It's irrational that [the financial markets] should ignore the Spanish government's reforms. So we must turn our attention to Germany and the ECB. It's up to them to put an end to this pressure which is battering our nation. Germany cannot hide behind a contradiction: on the one hand endorsing euro loans, on the other allowing Spain to totter on the edge of the abyss. The only explanation is that Germany intends to sever itself from a number of EU states. And say goodbye to an EU which is suffering under the design flaw of having no financial institution to assume ultimate responsibility. Merkel must allow [ECB president] Draghi to exert an influence over the markets, as he did for the second time months ago, and alleviate this unbearable situation."
» more information (external link, Spanish)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Banks, » Germany, » Spain, » Europe
Il Sole 24 Ore - Italy | Tuesday, 24. July 2012
If the European Central Bank (ECB) doesn't intervene now to halt the escalating European debt crisis the monetary union is doomed, warns Roberto Napoletano in the liberal-conservative business paper II Sole 24 Ore: » more
If the European Central Bank (ECB) doesn't intervene now to halt the escalating European debt crisis the monetary union is doomed, warns Roberto Napoletano in the liberal-conservative business paper II Sole 24 Ore: "The European Central Bank must do its bit to rescue the euro - and do it now. A radical shift in thinking is required because the Greek crisis has taught us that it's not enough to announce the limited purchase of government bonds. It must be made clear to the financial markets that there are no limits to either the power or the resources of the ECB. If we find the courage and the energy to do this, we will save the euro. If not, no one, I repeat no one, will have anything to smile about because sooner or later even the so-called AAA countries will pay a heavy price for the destruction they have caused with their short-sightedness. … The excuse that the ECB lacks the powers for such intervention doesn't apply, because the imperative of protecting the Eurozone gives the Bank the necessary authority. The Bundesbank, too, will be forced to recognise this."
» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Italy, » Spain
All available articles from » Roberto Napoletano
Diário de Notícias - Portugal | Tuesday, 24. July 2012
In view of the recent turbulence on Europe's stock markets the daily newspaper Diário de Notícias criticises Berlin's obstructive behaviour: » more
In view of the recent turbulence on Europe's stock markets the daily newspaper Diário de Notícias criticises Berlin's obstructive behaviour: "The risk premiums on Spanish (and Italian) bonds are climbing to record levels - despite the horrifying austerity package Berlin and Brussels have foisted on Madrid in exchange for approving assistance for Spain's banks. Regions like Valencia are bankrupt and need help from the central government. At the same time [Jens] Weidmann, the cynic who heads the Bundesbank, is pushing for Spain to apply for a complete bailout. What terrible cruelty! The EFSF has been reduced to small change, and the new euro bailout fund [the ESM] will be subject to the scrutiny of Germany's Constitutional Court at least until September 12. Meanwhile the ECB is still refusing to buy government bonds on the secondary market. To promise something that doesn't exist is the worst insult to those who need it. The silence of the cowards continues in most of Europe's capitals."
» full article (external link, Portuguese)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Italy, » Spain, » Europe
All available articles from » Viriato Soromenho-Marques
El País - Spain | Tuesday, 17. July 2012
According to the most recent estimates of the IMF, Spain's economy will also contract in the coming year. The left-liberal daily El País says the government's poor communication policy is to blame: » more
According to the most recent estimates of the IMF, Spain's economy will also contract in the coming year. The left-liberal daily El País says the government's poor communication policy is to blame: "The IMF's prognosis is realistic. Credit won't start flowing until the end of 2013, and even then only if the bank bailout in the first quarter of next year is successful. Foreign investors are leaving Spain because of the low growth prospects and uncertainties about the financial reform. … There are also other factors that are lowering confidence. One of them is the government's abysmal information policy, which is translating into a loss of credibility. … Vague indications are not the way to win the markets' trust. And it will be more difficult to ask the ECB for something the Spanish and the IMF take for granted: that it puts an end to the fluctuations in borrowing costs while the bank bailout is realised and the details of the banking union are sorted out."
» full article (external link, Spanish)
More from the press review on the subject » Fiscal Policy, » Economic Policy, » Banks, » Spain, » Europe
Il Sole 24 Ore - Italy | Tuesday, 17. July 2012
The IMF sees the European debt crisis as the greatest risk for the global economy at the moment and called on Monday for a strengthening of the European Central Bank to prevent the crisis from escalating even further. New powers for the ECB could soothe the panic on the markets, the liberal-conservative business paper Il Sole 24 Ore writes: » more
The IMF sees the European debt crisis as the greatest risk for the global economy at the moment and called on Monday for a strengthening of the European Central Bank to prevent the crisis from escalating even further. New powers for the ECB could soothe the panic on the markets, the liberal-conservative business paper Il Sole 24 Ore writes: "According to the IMF's estimates the yields on the bonds of countries like Italy or Spain are at least 200 basis points [two percentage points] too high. … Merely giving the ECB the authority to step in as and when it sees fit would be enough to prevent this impact. The awareness of the possibility of ECB intervention in a debt crisis would make redundant any fears about the country in question exiting the Monetary Union. The panic effect would be pre-empted, and, consequently, so would any increase in interest rates on government bonds. Paradoxically, the mere possibility that the ECB can buy government bonds would suffice to make its intervention superfluous."
» more information (external link, Italian)
More from the press review on the subject » Fiscal Policy, » Economic Policy, » Italy, » Spain, » Europe
All available articles from » Luigi Guiso
Rzeczpospolita - Poland | Monday, 16. July 2012
The US rating agency Moody's lowered Italy's credit rating from A3 to Baa2 on Friday, meaning the country is now just two notches above junk status. For the conservative daily Rzeczpospolita it is clear that the measures adopted by the EU summit two weeks ago have failed to take effect and that the Union cannot go on as it has: » more
The US rating agency Moody's lowered Italy's credit rating from A3 to Baa2 on Friday, meaning the country is now just two notches above junk status. For the conservative daily Rzeczpospolita it is clear that the measures adopted by the EU summit two weeks ago have failed to take effect and that the Union cannot go on as it has: "There will be no radical reforms [of the EU] because huge differences exist between individual states, for example between France and Germany and Southern Europe. Germany will never agree to the debts of individual countries being shared by all, because that would increase its own liabilities. Nor does Germany want the ECB to become a money press for the euro. ... But now more is needed than bailout packages, stimulus measures or banks that are directed by the EU: we need structural changes and reforms of our economy, which is no match for the Asian competition. Without new taxation systems, without a flexible job market and without a rise in worker productivity, nothing is going to change."
» full article (external link, Polish)
More from the press review on the subject » International Relations, » EU Policy, » Financial Markets, » Europe
All available articles from » Paweł Rożyński
Der Standard - Austria | Friday, 6. July 2012
The ECB's bringing the base interest rate down to a record low of 0.75 percent on Thursday won't be effective because in the present situation it will boost neither investment nor consumption, the left-liberal daily Der Standard contends: » more
The ECB's bringing the base interest rate down to a record low of 0.75 percent on Thursday won't be effective because in the present situation it will boost neither investment nor consumption, the left-liberal daily Der Standard contends: "Lowering the interest rate is like drinking beer. The first pint may tickle the palate, the second lift your mood. But the fifth or sixth, at most, is too much of a good thing. Lowering the interest rate to 0.75 percent will convince few businesses to invest in projects. And if it does, the quality of the investment must be extremely dubious if it's only profitable at an interest rate of under one percent. For that reason the ECB's decision to cut the interest rate will not usher in a new trend in the Eurozone. Economic recovery is not being smothered by high short-term financing costs, but because the future of the Monetary Union is being put in question and political insecurity is dampening investments and consumption."
» full article (external link, German)
More from the press review on the subject » Fiscal Policy, » Europe
All available articles from » Lukas Sustala
Le Temps - Switzerland | Friday, 6. July 2012
The ECB as well as the central banks of China and the UK introduced additional support measures on Thursday, but market reactions have been negative on the whole. That shows that too much is being expected of the central banks, writes the liberal daily Le Temps: » more
The ECB as well as the central banks of China and the UK introduced additional support measures on Thursday, but market reactions have been negative on the whole. That shows that too much is being expected of the central banks, writes the liberal daily Le Temps: "The disappointment is enormous because the expectations were too high, not only on the part of the financial community, which is always on the lookout for credit facilities that can support the stock markets for a while. The pressure, calls for assistance and other exhortations also came from the public and political spheres. … This is a rare, even unique, situation and additional proof that the role of the ECB has changed. Even though its president Mario Draghi denies it, he has largely overstepped his key mandate of guaranteeing price stability. … Will the roles that the central banks are being given today be revoked once Europe and the rest of the world are definitively out of this crisis? Nothing is less sure. In the meantime, these banks have never been more deserving of their names."
» full article (external link, French)
More from the press review on the subject » Fiscal Policy, » Financial Markets, » Banks, » Europe, » Global
All available articles from » Servan Peca
La Vanguardia - Spain | Friday, 6. July 2012
Mario Monti's No to the purchase of Spanish and Italian bonds is a dangerous stance, the liberal daily La Vanguardia warns after the ECB chief's statements on Thursday: » more
Mario Monti's No to the purchase of Spanish and Italian bonds is a dangerous stance, the liberal daily La Vanguardia warns after the ECB chief's statements on Thursday: "A good measure but a disappointing speech. This is how the meeting of the European Central Bank could be summed up, which yesterday cut the base interest rate from one percent to a historically low 0.75 percent in a bid to reactivate the economy. … If from a technical point of view these measures are good, why did the market react so aggressively? Basically because in the press conference that followed ECB president Mario Draghi refused to budge regarding the supportive purchase of Spanish and Italian debts. This is nothing new in the ECB's policy, but given the difficult situation in Southern Europe it seems lacking in solidarity and dangerous of Draghi to take a distanced stance regarding the public debt of problem states. … Draghi has caused a considerable increase in the yields and a marked decline in share prices on the increasingly jittery financial markets."
» full article (external link, Spanish)
More from the press review on the subject » Fiscal Policy, » Banks, » Europe
All available articles from » José Antich
De Tijd - Belgium | Friday, 6. July 2012
After the cut in the base interest rate ECB President Mario Draghi announced on Thursday that the bank does not plan to take further measures to solve the euro crisis, such as purchasing the government bonds of crisis countries. This brings the Eurozone down to earth with a bump, the business paper De Tijd comments: » more
After the cut in the base interest rate ECB President Mario Draghi announced on Thursday that the bank does not plan to take further measures to solve the euro crisis, such as purchasing the government bonds of crisis countries. This brings the Eurozone down to earth with a bump, the business paper De Tijd comments: "Draghi swept away all the optimism of last week's euro summit with his speech. The ECB is obviously of the opinion that it has done enough and that now it's up to the politicians to tackle the Eurozone's problems. … From the orthodox financial perspective this view is understandable. But the consequence will be that when the next fire flares up in the Eurozone the fire brigade won't be at the ready. And the permanent ESM bailout fund is not yet fully in place. This is the dangerous situation that is making the markets so nervous and causing the decline of the euro. The mill will keep on grinding until a plausible plan with concrete steps is on the table. The euro crisis will continue as long as the European leaders fail to come up with such a plan."
» more information (external link, Dutch)
More from the press review on the subject » Fiscal Policy, » Banks, » Europe
All available articles from » Jean Vanempten
© Bundeszentrale für politische Bildung
Further articles on the subject » Fiscal Policy, » EU Policy, » Europe
More from the press review on the subject » Fiscal Policy, » EU Policy, » Europe
Deutsch
English
Français
© 2005-2013