Later On

A blog written for those whose interests more or less match mine.

Why Europe is doomed, in 3 paragraphs

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Here are the paragraphs, from a Reuters story:

According to German officials, Merkel felt betrayed by Draghi’s speech at a central banking conference in Jackson Hole, Wyoming in August in which he pressed Berlin for looser fiscal policy to stimulate the economy.

Her entourage is also deeply skeptical about Draghi’s plan to buy up asset-backed securities (ABS) and covered bonds in the hope of encouraging commercial banks to lend.

Most of all, politicians in Berlin worry that if this scheme doesn’t work, the ECB president will be tempted to launch full-blown government bond buying, or quantitative easing. This is a taboo in Germany and a step Merkel’s allies fear would play into the hands of the country’s new anti-euro party, the Alternative for Germany (AfD).

Matt O’Brien explains in the Washington Post Wonkblog.

Written by LeisureGuy

25 October 2014 at 7:13 pm

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