Survival (whatever it takes)
Ireland successfully back on financial markets
Encouraging comments from Mr Dragi
Today’s release of EcoWeek is the last one before the end of August. But as the month will be pretty busy and probably stressful, we will keep you updated through EcoFlash, the publication that never sleeps.
This week brought some good news. Ireland made a successful come back on financial markets, raising long-term debt with no problem and at a relatively low rate. Mr Draghi also made very encouraging comments about the willingness of the ECB to preserve the euro “whatever it takes”. Even if this was then tempered by the Bundesbank, which reaffirmed its opposition to restarting the SMP and/or providing a banking license to the ESM, President Draghi’s commitment was very welcome. It leaves us speculating about what could happen.
A possible way, for driving down Italian and Spanish yields, would be some joint bond buying from the EFSF and the ECB. Something has to be done, and the ECB has every reason to be part of the scheme. As stressed by Mr Draghi, “to the extent that the size of the sovereign premia hamper the functioning of the monetary policy transmission channels, they come within our mandate”.
But the week also brought bad news, with yet another decline in the eurozone manufacturing sentiment, a GDP contraction in the UK and a marked slowdown of the US activity in Q2.
- Slower, lower, weaker. It’s time for holiday, but with liquidity on financial markets dropping, better keep an eye open
- The week in the US. In search of a second wind
- The week in the Eurozone. Should we authorise doping?
- Economic indicators
- Market overview