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Crisis Ensnares Central Bank in Desperate Bid to Save Euro
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Blackston and Karnitschnig describe the European Central Bank's role in the current crisis and buying of bonds of troubled eurozone countries. And the resistance in Germany to the ECB's purchase of bonds of eurozone countries to prevent contagion effects in the eurozone. ECB President Trichet only reluctantly pushed the ECB into bond purchases in the recurring crises, and saw the ECB's role as strictly limited to controlling inflation and maintaining a stable euro currency. There is resistance in Germany to the ECB printing money to cover eurozone debt of Greece, Ireland, Italy and Spain. This comes from the searing experience with hyperinflation, an economic crisis similiar to that of the U.S. with the Great Depression, when the Reichsbank printed money in the 1920's to buy large quantities of government bonds. The Bundesbank that ensured Germany's postwar recovery focussed on a single mandate to control inflation, and this is a key part of the ECB's charter. The first president of the ECB when it was founded in 1998, was Dutchman Wim Duisenberg, who would tell politicians: "I hear you, but I don't listen." When Frenchman Trichet became the second ECB president, he focussed on inflation fighting efforts. He warned against the extravagant spending and fiscal irresponsibility of some eurozone countries saying "we are dancing on a volcano."
ECB president Jean-Claude Trichet
02/05/2008
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ECB Chief Seeks Tighter Fiscal Union
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Europe’s Central Banker Engineers His Economics
New York Times 02/05/2008
Europe's Central Banker Seeks Deeper Fiscal Union
Wall Street Journal 06/03/2011
Trichet's Solution for an Imperfect Union
Wall Street Journal 06/03/2011
Trichet Urges Creation Of Euro Oversight Panel
New York Times 06/02/2011
European Central Bank Raises Rates as Expected
New York Times 07/07/2011
The ECB and buying of government bonds of troubled eurozone countries
08/07/2011
The purchases of Italian and Spanish bonds by the European Central Bank in addition to its holdings of 75 billion euros of Portuguese, Greek and Irish bonds creates additional balance sheet risk for the ECB. Losses in the value of collateral could wipe out the 10 billion euro capital base of the ECB. The pressing need to give resources and new powers to the European Financial Stability Facility so that this agency could do the bond buying in the place of the ECB.
Grouped Articles
German Court to Weigh Bond Buying by E.C.B.
New York Times 06/10/2013
ECB’s Coeuré Sends Strong Signal on Asset Purchases
Wall Street Journal 12/18/2014
European Markets Jolted by ECB Proposal
Wall Street Journal 01/21/2015
Quiet Start to Central Bank Bond-Buying Program for the Eurozone
New York Times 03/09/2015
Wall Street Journal 03/10/2015
Wall Street Journal 08/08/2011
The logjam between the bondholders (mostly French and German banks) and the German government- 2010-2012
07/01/2011
The roots of the Eurozone financial crisis go back to the issue of who should pay for the excess lending of French and German banks. Will it be the German taxpayer or the banks that took excessive risks? German financial experts, the German government and parliament, German public opinion, are all adamantly opposed to letting the banks off without sharing at least 50% of the costs of a bailout. A review done by the European Commission in coordination witht he IMF and the ECB, shows that from May 2010 (the date for the inception of the aid program to Greece) to September 2011, $52 billion of the $91 billion loaned to Greece went to pay bondholders for bonds that came due. The July 2011 EU agreement for Greece called for 21% of losses to be allocated to the bondholders. The German government is pushing for 50% and German parlamentary leaders in Merkel's party are balking at anything less.
Grouped Articles
Wall Street Journal 07/13/2011
New York Times 04/13/2013
Policy âTroikaâ for Europe Financial Woes at Odds
New York Times 06/07/2013
Most Greek bailout money has gone to pay off bondholders - The Washington Post
Washington Post 10/23/2011
Dexiaâs Collapse in Europe Points to Global Risks
New York Times 10/22/2011
European Officials Shaping Greek Rescue and Effort to Aid Banks
New York Times 10/22/2011
The views of Axel Weber, former head of the Bundesbank, on the ECB's role and the need to address the underlying problems in Greece
04/19/2010
Axel Weber says the European Central Bank should stick to its mandate of setting monetary policy and not get too involved in the crisis in Greece. He says Greece's problems are structural and may take a long time to resolve, as much as 30 years. The European leaders have to decide on solving the underlying problems so that they cut the losses and restart, by offering debt guarantees and using partial creditor haircuts. Simply giving additional loans -which can never be repaid considering the debt of 350 billion euros ($496 billion)- or addding short term liquidity for a 3-5 year solution as European leaders have done so far, won't work.
Grouped Articles
EU Dismisses IMF's Criticism On Greek Bailout
Wall Street Journal 06/07/2013
German Court to Weigh Bond Buying by E.C.B.
New York Times 06/10/2013
Weber Sees Greece Needing More Aid
Wall Street Journal 04/19/2010
The 'Silent Austerity' in Banking
Wall Street Journal 01/21/2014
Not Quite Checkmate for the Bundesbank
Wall Street Journal 12/22/2014
Germany's Weber Slams Rescue Efforts
Wall Street Journal 06/27/2011
ECB management and Executive Board
11/10/2011
Grouped Articles
ECB Moves Markets, Not Economy
Wall Street Journal 05/03/2013
ECB’s Coeuré Sends Strong Signal on Asset Purchases
Wall Street Journal 12/18/2014
Central Bankerâs Exit Gives France Opening
New York Times 11/10/2011
Crisis Ensnares Central Bank in Desperate Bid to Save Euro
Wall Street Journal 11/18/2011
European Central Bank Head, Draghi, Has New Powers
New York Times 07/02/2012
Central Bank Taps a Belgian for Key Post
Wall Street Journal 01/04/2012
European Central Bank policies in 2010-2012.
02/05/2008
The ECB rate changes and policy in 2010-2012.
Grouped Articles
ECB Moves Markets, Not Economy
Wall Street Journal 05/03/2013
Shares Rise on Wall Street and in Europe
New York Times 06/06/2012
Europe’s Central Banker Engineers His Economics
New York Times 02/05/2008
2 Major European Banks Keep Record-Low Rates
New York Times 11/04/2010
ECB Seeks Funds for Capital Base
Wall Street Journal 12/17/2010
Rate Rise Signaled for Euro Zone
Wall Street Journal 03/04/2011
The ECB and Italy
11/09/2011
Grouped Articles
Don't Bank on ECB Rescuing Italy
Wall Street Journal 11/09/2011
Italy Fears Rattle World's Investors
Wall Street Journal 11/10/2011
Central Bankerâs Exit Gives France Opening
New York Times 11/10/2011
Crisis Ensnares Central Bank in Desperate Bid to Save Euro
Wall Street Journal 11/18/2011
European Bank Chief Pushes Back
Wall Street Journal 11/19/2011
New York Times 11/19/2011
The resignations of Jurgen Stark and the ECB's purchase of sovereign bonds of Portugal, Italy and Spain
09/10/2011
The resignations of German representatives on the ECB Executive Board, Axel Weber and Jurgen Stark, over ECB purchases of sovereign bonds. Concern about political risk and financial risk and exceeding the ECB's charter. The need for the governments to assume the critical role of far-reaching reforms of the mechanism for decisions and sanctions.
Grouped Articles
German Court to Weigh Bond Buying by E.C.B.
New York Times 06/10/2013
Europe Bonds May Offer More Value
Wall Street Journal 08/23/2013
Bonds of Italy, Spain Narrow Gap With U.S., German Yields
Wall Street Journal 04/09/2014
As Bond Markets Twist, Investors Shout
Wall Street Journal 06/10/2014
Wall Street Journal 09/10/2011
Stark Walked a Fine Line Between German and EU Monetary Cultures
Wall Street Journal 09/10/2011
Italy's Mario Draghi, as the new president of the ECB
04/20/2011
Grouped Articles
ECB Moves Markets, Not Economy
Wall Street Journal 05/03/2013
Bonds of Italy, Spain Narrow Gap With U.S., German Yields
Wall Street Journal 04/09/2014
Italian Gains Support in Central Bank Race
Wall Street Journal 04/20/2011
Paris Backs Italy's Draghi as Europe's Central Banker
Wall Street Journal 04/27/2011
German Paper Finds Draghi Not So Bad After All
New York Times 04/29/2011
Trichet to Leave a Difficult Legacy at Central Bank
New York Times 05/31/2011
European Central Bank interest rates adjustments 2011-2013
03/04/2011
ECB interest rate adjustments and monetary policy.
Grouped Articles
ECB Moves Markets, Not Economy
Wall Street Journal 05/03/2013
New York Times 09/25/2011
ECB Struggles With Low-Altitude Flying
Wall Street Journal 11/10/2013
Shares Rise on Wall Street and in Europe
New York Times 06/06/2012
Wall Street Journal 03/04/2011
European Central Bank Raises Rates as Expected
New York Times 07/07/2011
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