Financial Times
July 6, 2011
How will he get out of this one? The escalating drama over Greece has confronted Jean-Claude Trichet, European Central Bank president, with one of the biggest dilemmas of his career.
On the one hand, he wants to prevent the crisis becoming a threat to the eurozone’s stability. On the other, he sees the ECB’s crisis-fighting role as near its political – and legal – limits.
The result, when Mr Trichet today presents the outcome of the ECB governing council’s latest monthly meeting, is likely to be carefully calibrated to sound tough and pile the pressure on governments to take action themselves, but leave the ECB with escape routes – just in case. A widely expected increase in the ECB’s main interest rate, from 1.25 per cent to 1.5 per cent is likely to be overshadowed as a result.
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