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The Maastrict Treaty should be changed to permit ECB bond buying

  • 04-04-2012 10:41PM
    #1
    Closed Accounts Posts: 535 ✭✭✭


    The ECB must step in and become a lender of last resort like any other central bank in the real world. I cannot imagine the consequences for the ECB failing to act. It is a core responsibility of every central bank to monetize debt and keep sovereign interest rates at sustainable levels. The Maastrict Treaty needs to be changed to allow unlimited bond buys. Inflation propaganda is far-fetched because it only takes into account the German economy. The latest Euro-Zone recession data reminds us why it's high time to give the ECB a growth-boosting mandate (aka Stimulus). The ECB needs to pump money into the Euro Zone economy or risk a severe recession. There is no option but to change the Maastrict Treaty to permit monetization. Amazingly, Jens Weidmann is putting a negative spin to such a move given his country's benefit from Euro-Zone membership. The ECB needs to become a player like any other central bank in the real world. Or should we consider print our own currency (IEP) again?


Comments

  • Registered Users, Registered Users 2 Posts: 7,157 ✭✭✭srsly78


    They already did, in a roundabout way. They gave really cheap credit to banks so the banks could buy bonds (this credit could only be used for bonds), or something like that. Has same effect, but respects letter of the law.


  • Closed Accounts Posts: 535 ✭✭✭Skopzz


    LTRO hasn't worked because bond yields are on the rise again. The markets are asking the ECB to become a lender of last resort. The reason is because the ECB has unlimited firepower to force down yields indefinitely.


  • Closed Accounts Posts: 535 ✭✭✭Skopzz


    Also, the way in which the ECB sees Ireland as insignificant will also help contribute towards a rejection of the EU fiscal enslavement treaty.


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