Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

EU: Pressure on Spain to bow to bail-out
The Telegraph ^ | 8/1/2012 | Ambrose Evans-Pritchard

Posted on 08/01/2012 5:08:44 PM PDT by bruinbirdman

Italy’s leader Mario Monti is to make a last-ditch effort tomorrow to persuade Spain to swallow its pride and accept a formal rescue, hoping to clear the way for double-barrelled action by bail-out funds and the European Central Bank.


Mr Monti has emerged as the Latin bloc’s de facto “prime minister”.

The frantic diplomacy comes as investors wait nervously to see if German-led officials on the ECB’s governing council will stand behind the bank’s chief, Mario Draghi, who triggered a euphoric stockmarket rally last week with hints of intervention in the Spanish and Italian bond markets.

"The situation is dramatic: markets will react very badly if the ECB doesn’t deliver,” said Dmitris Drakopoulos from Nomura, ahead of the ECB’s crucial policy meeting tomorrow. The bond markets are continuing to signal deep alarm, with safe-haven flows into German two-year debt pushing yields to minus 0.08pc.

Former ECB governor Athanasios Orphanides said Mr Draghi had boxed himself into a corner. “Expectations are now so high, the ECB will have to announce something,” he said.

Bundesbank chief Jens Weidmann shows no sign of relenting, warning today that the ECB must not “overstep its mandate” or stray into fiscal rescues. He issued a blunt reminder that the German central bank is master of the euro project, and not “just one” bank among others. “We are the biggest and most important central bank in the euro system,” he told the Bundesbank journal.

While the Bundesbank does not command an ECB majority – and has been outvoted in the past – Mr Draghi must move with extreme care. Two German members of the ECB have already resigned in protest over bond purchases, seen as debt pooling by the back door. EU officials fear that Mr Weidmann may leave as well if

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
KEYWORDS:
Mario Monti was hand picked by EU to replace the ousted Berlusconi when Italy needed its first bail out.

EU bail out means the country's budget must be approved in advance by The Commission. Fiscal sovereignty has already been given up to EU by Ireland and Greece.

1 posted on 08/01/2012 5:08:50 PM PDT by bruinbirdman
[ Post Reply | Private Reply | View Replies]

To: bruinbirdman

No doubt any in Spain with a few Pesos to rub together have their Pesos offshore in gold or silver.. unless they are nuts..


2 posted on 08/01/2012 5:27:46 PM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson