Draghi

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Crush the Greeks!

ATHENS | By Yanis Varoufakis via TrumanTim Geithner is now on the public record, confirming that which we have always known: In February 2010, clueless as to the Euro Crisis that was about to engulf them, Northern European leaders decided to crush Greece. Collectively to punish (against even the Geneva Convention) a nation for having gone bankrupt within a Eurozone whose architecture never took into consideration the possibility that a member-state could become insolvent.



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The ECB wait-and-see stance

MADRID | By J.P. Marín Arrese | The ECB Board only reached, on paper, the decision to keep unchanged its official rates. Yet, the statement issued as an introduction to the press conference clearly outlined, for the first time, both its policy stance and firm commitment to act should the economy markedly deteriorate. Draghi refrained from providing his personal views on sensitive issues, such as the scope of quantitative easing, sticking to the literal content of the agreed statement. No doubt, his communication strategy had come under fierce criticism from other members of the Board, utterly upset by his flamboyant style and contradictory messages.


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ECB: Draghi is bound to act

MADRID | By JP Marín Arrese | Recent events underline the extent to which low confidence is running throughout Europe. The expected upsurge has petered out and investors are losing all faith in political leaders’ ability to redress the situation. As countries seem unable to agree on a joint strategy to foster growth, the onus to achieve this goal increasingly falls on the ECB. Thus, Draghi is bound to act today in order to curb the downward sentiment. Yet, unleashing his firepower over the last months has led nowhere, save for running short on ammunition.


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Silent whispers: Do murmurings of disaffection within ECB point to mounting obstacles for Draghi?

MADRID | By Ana Fuentes | Was Mario Draghi reckless to announce an ECB balance sheet expansion target? According to Reuters, some of his colleagues at the central bank are particularly aggrieved about a perceived “ secretive management style and erratic communication” and they will apparently  “urge him to act more collegially”. Could this leak be the beginning of a larger problem for the ECB chief? The bank was unwilling to comment on Wednesday.


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EU’s low growth hits financials

MADRID | By JP Marín ArreseCentral banks all over Europe bombastically hailed the stress tests results as solid evidence the banking system enjoyed enviable health. Their diagnosis utterly failed to impress the markets. Ten days later,  financials are plunging to fresh lows as low growth rates signify dire prospects ahead. Investors feel increasingly uneasy faced with dwarfish interest rates and dwindling intermediary receipts, leading to chronic underperformance and under-sized profits. Many fear that an inability to raise their own funds to plug gaps in their balance sheets might weigh on mounting impairment, sending shivers down the spine. Banks may face rough times ahead should deflationary bouts keep the European economy close to stagnation. 



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Germany’s dilemma: Between Europe and the AfD’s europhobia

FRANKFURT | By Lidia Conde | It is time to grow! Well, that’s everybody’s motto. However nobody agrees on how. That’s why the European Central Bank is moving ahead with its bond-buying program. After all, if the ECB steps away from its inflation target, the structural unemployment rate would increase and the potential economy growth would be reduced. 



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ECB: More questions than answers

MADRID | The Corner | The ECB disappointed all those who were keen to gain more concrete information on how it wants to expand its balance sheet over the coming months. Instead, Mr Draghi pointed out that inflation expectations, not balance sheet size, remain the ultimate yardstick of current and future ECB action. “We think this is the right communications strategy as we had become concerned that the ECB would set fairly explicit balance sheet targets that it might struggle to attain. The ECB offered a more cautious assessment of the growth and inflation outlook and left the door open for additional unconventional measures. Nevertheless, our base case scenario remains that sovereign QE will not be triggered,” UBS analysts commented.