Monday, 14 November 2011

Role of the European Central Bank

In previous posts I have referred to the problem facing the ECB: it is not legally constituted under the EU Treaty to do other than keep inflation down through managing the eurozone's interest rates. It is not a lender of last resort.  The nervousness of the ECB to stray from its role is accentuated by the German position that the ECB's power does not extend to the wholesale puchase of national governments' bonds.

Germany is calling the shots.

The position is set out well in the article you may read by following the link below.

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