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From Eurointelligence today:
The reaction from Germany was one of outrage.

At the press conference, Draghi said that one member vote No - no prizes for guessing who. Draghi said different central banks expressed different views, but all converged to this policy. As reported by Frankfurter Allgemeine and others, a Bundesbank spokesman quoted him as saying that he rejected the OMT on the grounds that it was too close to monetary financing, and that they would risks for taxpayers.

The FT's editorial headline says: Mr Draghi's audacious gamble. The comment said that the SMP fell short for technical reasons, which the OMT has fixed. But it warned that the heavy lifting has yet to be done. Italy and Spain still have to apply for a programme. And the process of closer integration remains subject to political risks.

While the non-German press seemed mostly impressed, the Germans went on a verbal rampage.

Holger Stelzner writes in Frankfurter Allgemeine that the decision means a formal end of the separation between monetary and fiscal policy in Europe. The southern countries can now continue to amass at low interest rate, without having to worry about financial markets. The northern countries are also happy, not having to keep asking their parliaments for more money. He says the conditionality can never be applied in practice. Will the ECB stop buying bonds because Italy refuses to reforms its dismissal laws? He concludes with a reference to the German constitutional court, and wonders what the courts view on this policy will be?

Marc Beise, writing in Suddeutsche Zeitung, defends the Bundesbank. He said the truly bad aspects of Draghi's decision was that the ECB left no doubt that it wants the euro to survive (Yes, we, too, had to read that sentence twice.) He writes this is not a statement a central banker should make. This is for politicians. He says the ECB has crossed an important line with its decision, but it is not irreversible. They will not be able to save the euro against Germany.

Note that these are Germany's two most important newspapers, straddling a wide ranging of public opinion from the right (FAZ) to the centre-left (SZ).

Interestingly, Bild Zeitung was relatively more moderate than the "serious" newspapers. Nicolas Blome dressed up his commentary in a pseudo-factual Q&A, in which he says that inflation will come, of course, but not immediately.



If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 05:13:41 AM EST
[ Parent ]
They will not be able to save the euro against Germany.

Fascinating... Logically, if "Germany" doesn't want the Euro any more, it should leave, rather than destroy it.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Fri Sep 7th, 2012 at 05:25:26 AM EST
[ Parent ]
Marc Beise, writing in Suddeutsche Zeitung, defends the Bundesbank. He said the truly bad aspects of Draghi's decision was that the ECB left no doubt that it wants the euro to survive (Yes, we, too, had to read that sentence twice.)
Does Marc Beise really expect the ECB council to vote for its own dissolution?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 05:47:56 AM EST
[ Parent ]
Marc Beise is a nimcompop.

the treaties assume a permanent euro and Draghi is obligated to operate on the basis of the treaties. Otherwise he is violating his duties in a way he could be impeached.

by IM on Fri Sep 7th, 2012 at 05:57:17 AM EST
[ Parent ]
Beise has just learned that "independence of the central bank" means they can take decisions he disapproves of. That hurts of course. Poor thing.
by Katrin on Fri Sep 7th, 2012 at 06:55:39 AM EST
[ Parent ]
I suppose we will run a "Euro death watch" thread on the day of the Constitutional Court decision?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri Sep 7th, 2012 at 05:26:04 AM EST
[ Parent ]
Sure, make it a diary. The Constitutional Court ruling is expected on the 12th (Wednesday).

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 05:45:34 AM EST
[ Parent ]
[...] He said the truly bad aspects of Draghi's decision was that the ECB left no doubt that it wants the euro to survive [...] He says the ECB has crossed an important line with its decision, but it is not irreversible. They will not be able to save the euro against Germany.[...]

Am I actually reading these words?


-----
sapere aude

by Number 6 on Fri Sep 7th, 2012 at 10:47:10 AM EST
[ Parent ]

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