By Noah Barkin – By avoiding bold short-term solutions, Merkel and Sarkozy left responsibility for warding off any new market attacks to the European Central Bank (ECB), which has bought up tens of billions of euros in bonds from weakened debtors like Italy and Spain to prevent the zone from breaking apart.
“I think the crisis in fact is likely to get worse before it gets better despite the announcements that we had yesterday,” Jacques Cailloux, chief European economist at RBS, told Reuters Insider television.
“The ECB is trapped here,” Cailloux said. “So I think we could end up having 150 billion euros to 200 billion euros ($215 billion to $290 billion) of Spanish and Italian bonds on the ECB balance sheet in the next month and a half.” more> http://is.gd/q2pwcw
- German economists say ‘Nein’ to ‘disaster’ eurobonds, EurActiv
- On the eurobond discussion and the dangers of mutualizing the debt, Protesilaos Stavrou, BlogActiv.eu
- In euro-zone crisis, German leader Angela Merkel’s options are limited, Howard Schneider, Washington Post
- Sarkozy, Merkel want Van Rompuy as ‘Mr Euro’, Reuters/EurActiv