ECB moves to stop a financial firestorm – and save Italy
This time it is tearing up the rule book entirely, announcing that it will not be bound by “self-imposed limits”. It will intervene in the sovereign debt markets wherever needed most – meaning that it can deploy its vast arsenal to defend Italy or Portugal – without strict conditions or ifs and buts.
It has vastly expanded the range of assets on the menu. It will do “as much as necessary and for as long as needed”.
While Frankfurt needs the fig-leaf of stating that the €750bn blitz is to ensure “the smooth transmission of its monetary policy in all jurisdictions of the euro area”, it is clear that the ECB is in reality acting to prevent the collapse of Italy's sovereign debt, which in turn would set off a Club Med chain-reaction within hours and blow up monetary union.
It took 20 years but the eurozone finally has its own version of the US Federal Reserve. Or as founding father Jean Monnet famously put it, “Europe is forged in crises”.
Ambrose Evans-Pritchard, Telegraph 19 March 2020
The European Central Bank can’t stop the euro-area from sliding into recession but it may be able to prevent another devastating debt crisis.
Italy has said it’ll spend 25 billion euros on direct stimulus, and more is likely to follow.
France has pledged to guarantee up to 300 billion euros of bank loans to companies,
while Spain has unveiled a 117 billion euro plan to help keep companies afloat.
Bloomberg 20 March 2020
Krisen kan fördjupa EU-samarbetet trots att ingen egentligen är ute efter det
Annika Ström Melin DN 18 mars 2020
It has vastly expanded the range of assets on the menu. It will do “as much as necessary and for as long as needed”.
While Frankfurt needs the fig-leaf of stating that the €750bn blitz is to ensure “the smooth transmission of its monetary policy in all jurisdictions of the euro area”, it is clear that the ECB is in reality acting to prevent the collapse of Italy's sovereign debt, which in turn would set off a Club Med chain-reaction within hours and blow up monetary union.
It took 20 years but the eurozone finally has its own version of the US Federal Reserve. Or as founding father Jean Monnet famously put it, “Europe is forged in crises”.
Ambrose Evans-Pritchard, Telegraph 19 March 2020
The European Central Bank can’t stop the euro-area from sliding into recession but it may be able to prevent another devastating debt crisis.
Italy has said it’ll spend 25 billion euros on direct stimulus, and more is likely to follow.
France has pledged to guarantee up to 300 billion euros of bank loans to companies,
while Spain has unveiled a 117 billion euro plan to help keep companies afloat.
Bloomberg 20 March 2020
Krisen kan fördjupa EU-samarbetet trots att ingen egentligen är ute efter det
Annika Ström Melin DN 18 mars 2020
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