The Banking and Strategy Initiative

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European Sovereign Debt Crisis: ECB drops principled stand, Trichet leaves

ECB head Jean-Claude Trichet says goodbye to MEPs

Image by European Parliament via Flickr

As expected Mario Draghi will carry on at ECB much in the vein of the Fed in the USA with Trichet’s last policy meeting before he leaves at the end of the month, delivering Liquidity support for the embattled European banks :

“The economic outlook remains subject to particularly high uncertainty

and intensified downside risks,” Trichet

told a news conference, offering a more gloomy prognosis

than last month when he merely talked of downside risks.

ECB’s principled Economics is in danger of losing basis for support even as German voters become more likely to demand separation rather than paying for everyone else and the party shifts to Mario Draghi’s more conservative ‘on-going’ economics looking for Eurobond support for sovereigns and simpler liquidity for banks and sovereigns before the Euro falls thru the hole in the pan into the fire..

Trichet though has been unfortunate in having to leave with more than half his work undone than his American counterparts who did not hedge their bets or ask for extra discipline when ensuring Fed support thru Congress and the White House since 2008 itself.

For the first time since World War II the crisis is very much concentrating on the advanced economies Europe, the U.S., Japan…”

It is not a short-term phenomenon.”

Here’s wishing the Italians better luck with the Elephant in the room / Deux la macchiatto et al




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