Monday, 10 June 2013

Not "Whatever it Takes to Save the Euro"

Central bankers described the process as "containment."  The European Central Bank has commissioned legal opinion on how much and what can be involved in OMT.  This is an attempt to influence the German Constitutional Court as it considers the use of OMT to rescue European Member States - and particularly Italy -  drowning in sovereign debt.

Often described as 'Eurobonds by any other name'  OMT runs counter to both the laws governing the European Central Bank (pace Draghi's opinion) and  the German Constitution.  Furthermore, telling the markets that the rule is 'whatever it takes',  and the German Constitutional Court that effectively OMT is capped at 524 billion euros because of the maturities of the bonds it would purchase isn't reassuring either.

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