Smoke and mirrors

The euphoria of earlier today has soon evaporated.  The decision of the ECB to make funds available to banks in the hope that they would use the funds to purchase sovereign debt (and thus reduce the interest on such debt) is the subject of gloomy analysis.  There is no guarantee that the banks will use the funds for such a purpose.  It was a ruse by the ECB to overcome the legal block on it purchasing sovereign debt directly.

The ECB may have averted a liquidity crisis in the European banking system but is has done nothing to deal with the issues of recession and the disparity between northern and southern states' competitiveness.

http://www.telegraph.co.uk/finance/financialcrisis/8969137/Euroland-euphoria-on-Mario-Draghi-bank-rescue.html

http://www.telegraph.co.uk/finance/financialcrisis/8970049/European-banks-borrow-record-489bn-from-ECB.html

http://www.bbc.co.uk/news/business-16282463
Peston: ECB's rescue of eurozone banks is temporary.

http://www.bbc.co.uk/news/business-16282206
Huge demand for ECB's three year loans

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100013911/herr-draghi-or-signor-draghi-and-the-ecbs-santa-rally-technical/

http://www.spiegel.de/international/europe/0,1518,805135,00.html
ECB's risky plan to flood banks with cash

Below, an article from 30th September 2011
http://rt.com/news/eu-economy-crisis-solution-829/

In Italy there is fear that the country is about to enter recession.
http://www.telegraph.co.uk/finance/financialcrisis/8969778/Italy-recession-fears-as-growth-contracts.html