The European Central Bank spent most of yesterday rejecting any hope of an imminent intervention in the European bond markets, to put a cap on the spread between the yields of the cheapest and most expensive sovereign bonds. But Ambrose Evans-Pritchard of the Telegraph (UK) not only confirmed the existence of the program, but said Germany would get behind it.
|By: David Dayen Tuesday August 21, 2012 10:00 am|
|By: David Dayen Monday August 20, 2012 9:25 am|
According to the German magazine Der Spiegel, the European Central Bank has floated a scheme to set limits on bond yields for sovereign debt among member nations in the Eurozone, essentially through a mass bond-buying program. But the ECB quickly put out something like a denial.
|By: David Dayen Friday August 17, 2012 6:44 am|
The markets have been pleased of late because of a belief that the European debt crisis will resolve itself. The European Central Bank could step in and purchase sovereign bonds, if they can get Germany to sign off. Spain is inching toward a formal request for bailout funds, which is what the ECB wants so they can impose the reforms they have sought. And there’s just a general sense that European leaders will juggle enough balls in the air to keep the euro from collapse.
If only that were the sole problem in Europe.
|By: David Dayen Tuesday August 14, 2012 9:10 am|
The emerging recession continues in the Eurozone, as GDP contracted by 0.2%. The loss was slightly smaller than expected, but that’s something of a double-edged sword. The economy grew in Germany but dropped in more struggling areas like Italy, Portugal, Spain and Greece. This means that one governing authority must apply a unified monetary policy on a widely divergent region.
|By: David Dayen Monday August 6, 2012 8:20 am|
Bond yields in the trouble spots of Europe have actually come down a bit, as observers get more comfortable with Mario Draghi’s unfolding strategy at the ECB. He appears now to have at least qualified approval from Merkel’s government, if not from the German Central Bank, provided the German Supreme Court finds the use of the bailout mechanism to support bond purchases permitted by the German Constitution.
|By: David Dayen Thursday August 2, 2012 8:10 am|
Europe is tanking today after the European Central Bank’s Mario Draghi quite literally failed to put his money where his mouth is. Last week, Europe cheered when Draghi said in a press conference that the ECB would do “whatever it takes” to save the euro. He also said that the high bond yields in Spain and Italy interfered with his ability to conduct monetary policy.
|By: David Dayen Tuesday July 31, 2012 9:40 am|
Mario Draghi can only say “we’ll do whatever it takes to save the euro” for so long before he has to, you know, do whatever it takes. But Draghi can only go so far without the support of the Germans, and that support looks tenuous at best.
|By: David Dayen Saturday July 28, 2012 7:00 pm|
European markets have surged over the last 24 hours, basically entirely due to a speech by Mario Draghi, the head of the European Central Bank. He said that his organization would do “whatever it takes” to save the euro, and that was apparently all it took.
|By: David Dayen Tuesday July 24, 2012 5:22 pm|
The Spanish 10-year bond yield keeps going straight up. It sits now at 7.62%, a high since the creation of the euro. They will need to return to the markets to sell bonds on August 2, and if the yields are at the same rate, it will be very difficult for them to finance them.
|By: David Dayen Monday July 23, 2012 2:48 pm|
In addition to Spain’s woes, the other major crisis in Europe’s lap at the moment is the potential exit of Greece from the currency union, which Germany sees as more and more manageable. But experts believe a Greek exit will set in motion a series of consequences that will be harmful to Germany and other countries in Europe.