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Yields on Greece's 10 year bonds rise to nearly 9% in October 2014, as growth slows to near zero in the eurozone, including Germany, in the second half of 2014.

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European Central Bank executive board member Benoit Coeure, says the ECB will act quickly on a program to buy government bonds, so as not to fall behind the curve in taking action. He said the ECB had a moral and legal responsibility to act, considering the low annualized inflation of 0.3% in November 2014. Analysts say this could come as early as Jan 22, at the next ECB meeting, because the meeting in March may be too late. Coeure pointed out that the design of the program will be made in the manner similiar to that of the Outright Monetary Transactions Program of 2012, so that broad consensus is achieved. The ECB's staff is currently working on this. The U.S. and Japan have implemented monetary easing programs with quantitative easing, and the ECB is now moving in this direction to increase growth and bring inflation to about 2%. The ECB also now plans to put out detailed policy minutes after each meeting. The euro is expected to weaken further below $1.24 with the announcement of the program....

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Martin Feldstein points out why the recent agreement for a "fiscal compact" is no more than an empty statement about fixing the eurozone's finances. In this respect it is no different than the Stability and Growth Pact it replaces, with serious weaknesses. Feldstein cites the weaknesses in the language of the agreement. Each eurozone country is required to limit its"cyclically adjusted" budget deficit to 0.5% of GDP and bring its debt down to 60% of GDP. Compliance will be performed by the European Court of Justice and fines imposed. In practice the questions loom large- for a country like Spain with a 23% unemployment rate, isn't all of the 6% budget deficit cyclical? Again the agreement says deficits are calculated "net of one-off and temporary measures." Under this provision a lot of the stimulus programs would be considered in the category of "one-off." Other language lets eurozone countries frame budgets based on "exceptional circumstances" and "periods of severe economic downturn." Italy has declining economic growth, does it make sense to have a large budget surplus in that situation to lower debt to GDP, and how does that goal relate to "exceptional circumstances."...

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The Italian government sold 5 billion euros of three year bonds in Jan 2013 at an interest rate of 1.85%, the lowest since 2010. This is a remarkable change from 2012.

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Ignazio Angeloni heads the financial supervisory authority setup by EU leaders in 2013 inside the European Central Bank. The NYT's Danny Hakim's interview with Angeloni on the task facing Angeloni and the ECB as it takes on supervision of all EU banks.

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Jorg Asmussen, Germany's representative on the ECB'S Executive Board, will take the position of deputy secretary in the Labor Ministry in the new coalition government of Angela Merkel with the SDP. He moves to Berlin from Frankfurt to be close to his two small children and family, who continued to live in Berlin after Asmussen moved to Frankurt ECB headquarters. Germany is likely to nominate Sabine Lautenschlager, member of the executive board of the Bundesbank, to Asmussen's position on the executive board of the ECB. The ECB Governing Council, including the six member executive board and the heads of 17 central banks, will now have the first female member. Ms. Lautenschlager's expertise is in banking regulation, which is relevant today because of the ECB's new role as regulator of banks in the eurozone. Asmussen, who is from the SDP, assumes a position under Labor minister Andrea Nahles. He will be responsible for introduction of the national minimum wage, which was a key demand of the SDP for joining the coalition with Merkel....

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The legacy of Jean-Claude Trichet, who led the European Central Bank from 2003 to 2011. This period covered the global financial crisis of 2008 and the Eurozone debt crisis for Ireland, Greece and Portugal. During this period Trichet acted decisively in shaping European policies for the ECB as a pan-European institution.

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During the November 2011 to February 2012 period Spanish banks increased holdings of government bonds by 68 billion euros, and Italian banks by 54 billion euros under the ECB's Long Term Financing Operation. That program helped to lower bond yields of the two countries for the 1st quarter of 2012. With Spain's economy facing more austerity measures at a time of 23% unemployment, bond yields have moved back up for Spain in April 2012. The increased holdings of government bonds by Spanish banks increases risks at a time when banks in Spain have not increased lending in the economy and hold a large number of bad mortgages in the country's housing bust.