Current ECB chief Jean-Claude Trichet will stand up and say he’s not going to bail out the PIIGS, while in the background aggressively buying PIIGS debt.He has a reputation of favouring hard currency, but if you thought the ECB was stingy, just wait til next year.
From Mike O’Rourke of BTIG:
The bonds of the troubled European Sovereigns still have not fully stabilised. Bank of Italy Governor and ECB Director Mario Draghi warned the ECB against aggressive bond purchases of the debt of troubled Sovereigns. The position aligns Draghi with Bundesbank President and legendary hawk Axel Weber. Both men are leading candidates to succeed Jean Claude Trichet when he steps down in October. The media is reporting that Germany would like to address the ECB succession plan in January. It will be a development worth watching should a hawkish successor to Trichet emerge early next year.
Of course, this will only put more presure on fiscla authorities — notably the Germans — to put into place more permanent structures to avoid a crisis.
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