Opinion

Paul Taylor

Insight: ECB thinks the unthinkable, action likely weeks away

Paul Taylor
Jul 30, 2012 14:31 UTC

FRANKFURT/PARIS (Reuters) – The European Central Bank is thinking the unthinkable to save the euro, including resuming its controversial bond-buying program and possibly even pursuing quantitative easing – in effect printing money.

Bold action is probably at least five weeks away, insiders say, though some more clues may come when the ECB reveals its latest interest rate decision on Thursday.

Several other pieces have to fall into place before the ECB will act decisively, insiders say. These include a request for assistance from Spain, which Madrid is still resisting, a decision by euro zone leaders to let their bailout fund buy bonds at auction, and a German court ruling on the legality of the euro zone’s permanent rescue fund, due on September 12.

Above all, ECB President Mario Draghi must overcome the resistance of Germany’s powerful central bank, the guardian of monetary orthodoxy, glowering from the other side of Frankfurt.

Draghi raised expectations last Thursday that the ECB would resume buying sovereign bonds as Spanish and Italian borrowing costs vaulted towards levels that could force the euro zone’s third and fourth largest economies out of the credit markets.

ECB thinks the unthinkable, action likely weeks away

Paul Taylor
Jul 30, 2012 14:22 UTC

FRANKFURT/PARIS, July 30 (Reuters) – The European Central
Bank is thinking the unthinkable to save the euro, including
resuming its controversial bond-buying programme and possibly
even pursuing quantitative easing – in effect printing money.

Bold action is probably at least five weeks away, insiders
say, though some more clues may come when the ECB reveals its
latest interest rate decision on Thursday.

Several other pieces have to fall into place before the ECB
will act decisively, insiders say. These include a request for
assistance from Spain, which Madrid is still resisting, a
decision by euro zone leaders to let their bailout fund buy
bonds at auction, and a German court ruling on the legality of
the euro zone’s permanent rescue fund, due on Sept. 12.

Euro exit talk risks self-fulfilling prophecy

Paul Taylor
Jul 23, 2012 08:48 UTC

PARIS (Reuters) – To understand the impact of a potential Greek exit from the euro zone, imagine an operating theatre inside a betting shop.

As surgeons prepare to amputate a gangrened foot to prevent infection spreading to healthier parts of the body, gamblers on the sidelines lay bets on which limb will be next for the chop.

Talk of a possible Greek exit has already sapped investors’ confidence in the 17-nation single currency area and contributed to higher borrowing costs for Spain and Italy. It is making a planned return to market funding next year harder for Ireland and Portugal, which are implementing tough bailout programmes.

Analysis: Euro exit talk risks self-fulfilling prophecy

Paul Taylor
Jul 23, 2012 06:08 UTC

PARIS (Reuters) – To understand the impact of a potential Greek exit from the euro zone, imagine an operating theatre inside a betting shop.

As surgeons prepare to amputate a gangrened foot to prevent infection spreading to healthier parts of the body, gamblers on the sidelines lay bets on which limb will be next for the chop.

Talk of a possible Greek exit has already sapped investors’ confidence in the 17-nation single currency area and contributed to higher borrowing costs for Spain and Italy. It is making a planned return to market funding next year harder for Ireland and Portugal, which are implementing tough bailout programs.

Euro zone fragmenting faster than EU can act

Paul Taylor
Jul 9, 2012 06:14 UTC

PARIS (Reuters) – Signs are growing that Europe’s economic and monetary union may be fragmenting faster than policymakers can repair it.

Euro zone leaders agreed in principle on June 29 to establish a joint banking supervisor for the 17-nation single currency area, based on the European Central Bank, although most of the crucial details remain to be worked out.

The proposal was a tentative first step towards a European banking union that could eventually feature a joint deposit guarantee and a bank resolution fund, to prevent bank runs or collapses sending shock waves around the continent.

Analysis: Euro zone fragmenting faster than EU can act

Paul Taylor
Jul 9, 2012 06:05 UTC

PARIS (Reuters) – Signs are growing that Europe’s economic and monetary union may be fragmenting faster than policymakers can repair it.

Euro zone leaders agreed in principle on June 29 to establish a joint banking supervisor for the 17-nation single currency area, based on the European Central Bank, although most of the crucial details remain to be worked out.

The proposal was a tentative first step towards a European banking union that could eventually feature a joint deposit guarantee and a bank resolution fund, to prevent bank runs or collapses sending shock waves around the continent.

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