Financial Times
November 27, 2011
Berlin and Paris may have agreed to a ceasefire on their very public spat over European Central Bank intervention to stem the sovereign debt crisis, but France is still hoping that concerted efforts by eurozone leaders on entrenching fiscal reforms will lead to a “Christmas present” of action by the ECB.
The aim now is to create conditions in which the bank, acting within its current monetary policy mandate – and less constrained by overt political pressure – can take additional moves to counter the relentless market pressure on sovereign bonds.
“It is appropriate at this moment not to politicise the debate around the ECB. If the ECB decides to do something, like the Bank of England or the [US] Federal Reserve, it should be decided by the ECB alone,” said one senior Paris official.
France believes the ECB could be prepared to step up its intervention if eurozone leaders complete, by the next European summit on December 9, a series of actions that would persuade the central bank that a durable framework for a return to fiscal and economic stability for the single currency was – at long last – in place.
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