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No One Happy Except Stock Market; Discord Emerges in Spain, Italy, Germany to ECB Announcement
Discord Emerges
It's not just Germany expressing reservations about the ECB's plan to "Save the Euro". Spain, Italy, and Germany all have concerns about the plan launched last week by ECB president Mario Draghi.
Germany does not like the plan because it does too much (please see 54% of Germans Want Constitutional Court to Kill the ESM; Merkel's Disingenuous Reservations) but Italy and Spain are annoyed they may have to bow to the Troika to get bailouts.
Please consider After High Note for Euro Plan, Discord Emerges.
Greeted with initial fanfare by investors and economic officials, the unlimited bond-buying plan that the European Central Bank president, Mario Draghi, announced Thursday ran into immediate political problems in the crucial countries of Germany, Spain and Italy.
In Germany, despite Chancellor Angela Merkel’s support for Mr. Draghi and the independence of the Central Bank, political and news media reaction was scathing, with accusations that the bank, in seeking to stabilize the euro currency union, was subverting its mandate to fight inflation and forcing debt upon euro zone members.
“A Black Day for the Euro,” “Over the Red Line” and “Pandora’s Box Opened Forever” were some of the German headlines, with the normally sympathetic Süddeutsche Zeitung headlining an editorial: “The E.C.B. Rewards Mismanagement.” Even the German Bundesbank, officially part of the European Central Bank, put out a statement commenting acidly that the plan was “financing governments by printing bank notes.”
At the same time, the two intended beneficiaries of the Draghi plan — Spain and Italy — expressed reluctance to ask the bank for help, even if both might eventually have little choice but to seek aid. The governments in Madrid and Rome apparently fear the political impact at home of bowing to whatever demands for harsh economic policy changes might come with the aid.
“Those who did everything to have the E.C.B. help now say they don’t want it,” Ferruccio de Bortoli, editor in chief of the newspaper Corriere della Sera, said in a Twitter message. “Speculation will play on this contradiction.”