The Euro Zone Will Defend Its Money: Experts Hail Resolute Action

“The message has gotten through: the euro zone will defend its money,” French Finance Minister Christine Lagarde told reporters in Brussels early Monday.

With massive resolve after a 14 hour meeting, 16 euro nations agreed to offer financial assistance worth as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank (ECB) will counter negative and “severe tensions” in “certain” markets by purchasing government and private debt.

Marco Annunziata, chief economist at UniCredit Group in London, quickly released a statement following the ECB announcement: “This truly should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion.”

“I think they will have bought themselves a significant amount of time to do the right thing,” said Barry Eichengreen, an economics professor at the University of California, Berkeley.

“This sets a precedent for the rest of the life of the Central Bank and will have likely surprised even the most seasoned observers,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group. “The ECB’s intervention was necessary to short circuit the negative feedback loop…”

The swift and united action will likely now turn most eyes back onto the fundamentals of a worldwide economic recovery that is accelerating.

1 comment to The Euro Zone Will Defend Its Money: Experts Hail Resolute Action

  • gf1605

    It’s like the saying that if you owe the bank $50000 they own you, but if you owe a trillion dollars you own them… But the bank owns the governments, so there’s nothing to fear. For them. They’ll co-opt the central bank – not really co-opting, since this is the purpose of a central bank – into bailing them out. That’s right, them. Not the sovereign debtor who could just as soon default. Cause it would be good for the people for these governments to default. And not be burdened by massive interest payments, and ‘austerity measures’. And then maybe people would learn to stop lending money to governments, or at least make them pay higher interest to at least somewhat disincentivize borrowing. Wouldn’t that be nice. And I can dream, can’t I?

    No. They’re saving the countries that are under attack from speculators. That’s much simpler. I can sleep better if we just blame, as always, the evil speculators for attacking the poor, defenseless bankers… I mean governments. Wait, are they still the good guys? I just don’t know what I’m supposed to believe anymore.

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