Ray of light in Europe’s dark crisis

The euro rose and borrowing costs
for crisis-hit euro zone countries tumbled amid speculation the ECB could take
decisive steps to combat turmoil that has stoked contagion worries in the
United States and Asia.

An $110.7-billion EU/IMF rescue of
Ireland last weekend and public assurances from European leaders that the euro
will be defended at any cost have failed to impress investors who are targeting
Portugal, Spain and Italy in a test of the EU’s resolve and crisis-fighting resources.

Reflecting global concerns about
the euro zone crisis, the U.S. Treasury announced it would send an envoy to
Europe this week to discuss the turmoil with governments in Berlin, Madrid and
Paris.

G20 sources also said deputy
finance ministers from the group of major rich and developing nations had
discussed Europe’s financial plight in a conference, although they described
the call as routine.

There’s growing speculation the
European Central Bank will unveil new anti-crisis measures after it meets today,
Thursday, including possibly new purchases of government bonds.

The obstacles to such a step are
high. An ECB bond purchase program launched in May after Greece was bailed out
has been controversial within the bank, and influential Bundesbank head Axel
Weber has called publicly for it to be scrapped.

But traders said the ECB was
supporting the market through bond purchases on Wednesday. The Frankfurt-based
central bank declined to comment.

A rising number of economists say
the ECB may need to throw out its rule book to save the euro, particularly as
governments seem to be running out of ideas for restoring confidence in their
bold 12-year old currency project.

BIZeuropeSTORY

A woman walks past a shop in Dublin’s North side.
Photo: File
0
0

NO COMMENTS