If the Eurozone Central Bank is so "confident" of growth as they say, then why would this be necessary at all? These are not the actions of confidence, but of desperation!
from EuroIntelligence.com:
So much for phasing out the bond purchasing programme. The latest weekly ECB data suggest that the ECB bought €237m worth sovereign bonds last week, the highest since the middle of August, according to the FT. Still small in absolute size, the paper notes, it is a sign of continuing problems in eurozone bond markets. Irish traders last week reported that the ECB had been in the market to support Irish bonds, whose yield spread to German bunds rose to new record levels. The article suggested that the ECB was also buying Greek and Portuguese bonds.
Saturday, September 18, 2010
ECB Initiates New Program of Quantitative Easing (Monetization of Eurozone Debt)
About that ECB’s exit strategy
Ralph Atkins and David Oakley have an excellent analysis in the FT about the change in the ECB’s exit strategy. While a year ago it was the conventional wisdom inside the ECB that the banking support policy would have to be phased out, and only then could interest rates rise. That is no longer so. As banks have become dependent on generous ECB liquidity support, it is possible that the monetary tightening occurs while the liquidity policies are still in place.
European Commission optimistic about eurozone
The European Commission published its autumn forecast and, as ever, the news coverage is taking a national angle on this. El Pais is worrying about increasing growth divergences in the eurozone, with Spain falling far behind Germany with its 3.4% growth rate. The Portuguese newspaper Negocios didn’t even bother to report about any other country but Portugal, reporting that the European Commission said that Portugal has “an opportunity to recover” but that it must “intensify consolidation”. For the eurozone as a whole GDP is forecasted to rise 1.7% this year (rather than a previously projected 0.9%). La Repubblica picks on the Commission’s warning that labour market dynamics are still fragile.
