Sunday, July 29, 2012

Key #Merkel Ally Doesn't Support #ECB Bailout


"CSU-Chef Horst Seehofer hat sich gegen den Kauf griechischer oder spanischer Staatsanleihen durch die EZB ausgesprochen. "Das ist nicht die Aufgabe der Zentralbank", sagte Seehofer im ZDF-Sommerinterview."

In other words, Seehofer, who heads a big part of the current coalition supporting Merkel, doesn't recognize the ECB's mandate to purchase greek or spanish debt...

He has no problem with the ECB taking care of the Euro currency ("Stabilität der Währung"), but doesn't recognize sovereign debt purchases ("Aufkauf von Staatsanleihen") as a necessary part of that.

We'll just have to see how Draghi responds this week; the bond yields for Greece and Spain may tell the story.

This reminds me of how we joked about the new currency and called it the "Teuro" during the Euro transition. "Teuer" means expensive in German, so it was an amusing play on words that became popular when consumers noticed that the prices on just about everything seemed to go up under the new currency.  If the Germans thought the Euro was expensive then, what do they think the people of Greece and Spain are feeling now?

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