From today’s Open Europe news summary:
ECB disappoints markets by holding policy
The ECB yesterday held interest rates and revealed the details of its purchases of covered bonds and asset backed securities – the former will begin in the second half of October while the latter will start later this year. The ECB also said it would buy products from Greece and Cyprus event though they are not of investment grade rating, although such purchases would require added security including the fact that the country must still be under a bailout programme.
This month’s meeting was held in Naples with significant protests against the ECB taking place. In his press conference ECB President Mario Draghi said that such protests were “understandable” due to the economic pain but stressed that this is why reforms are needed and warned that such reforms would take place whether countries were in or out of the Eurozone.
The ECB will buy “…products from Greece and Cyprus…(that) are not of investment grade…” and only if “the country…(is)…still under a bailout programme.” In other words, the ECB will buy worthless bonds from Greece and Cyprus only if it gives them additional money to repay the bonds. What more evidence do the Germans need to convince them that the ECB and the euro are nothing more than vehicles of capital destruction? Time for Germany to put an end to this nonsense and get out. Patrick Barron