Dispute over spreads

At the EU summit in Brussel was discussed for the first time on market failure and possible countermeasures. Especially Italy makes prere – involves the Eurozone on the bond markets to reduce interest rates?

What are the causes of the euro crisis? So far, the Orthodox German interpretation dominated the debate: the crisis was created by a lack of competitive assistance and excessive debt. But at the EU summit in Brussel Chancellor Angela Merkel lost the difference on Thursday for the first time. Already on his arrival in Brussel provoked the Italian Premier Mario Monti, who was once used on Merkel’s penetration, with the demand, something against the "excessive" Interest on the Italian bond market.

The Government in Rome had to offer for new ten-year bonds at 6.19 percent most recently as high interest than since December no longer. Also in Spain, despite the planned billion package from the Euro-Rescue Fund for the banks, the situation has not relaxed, on the contrary. Investors require about seven percent returns for long-term bonds – in the case of highly high sads, Ireland and Portugal had to escape among the rescue umbrella. Minister Prosident Mariano Rajoy warned that the country can not finish permanently at these costs.

So far, discussions about risk appearance and market reactions in Brussel Tabu were. Although the bond markets with low interest rates for Sudeuropa have set false incentives for years, there never been a serious discussion at the summit level. Also, when it came suddenly to higher spreads for Lander like Greece three years ago, this was officially not an ie. The investors had just recognized the problems and were finally finally "appropriate" Challenge yields, threw it with the consultants Merkel.

Who not satisfied with it, was supplied with numbers from the 1990s, which should prove that the spreads then – before importing of the euro – still high. The fact that Landers like Greece or Italy were still able to defend themselves with interest rate cuts, devaluations and other monetary policy funds because they have had their own central bank, ubergingen the German experts faulty.

No occasion for panicmaking

Also now Try Merkel’s adviser again the old one "Spin". The interest rates are high, but that’s just a snapshot. "I warn to highlight an interest rate in a particular situation as if this is an average", Stray one of the German spindospheres before and during the EU summit. "The interest race fluctuate." There is no reason, "to expire in distressing". For "Panicmaking" already there is no occasion.

This was a clear side hob on Monti, who is in front of a "catastrophe" warned if the summit should go apart without decussing that lower the interest rate prere. But the Italian did not impress from Merkel’s callfel. He demanded a massive intervention on bond markets. As in Italian government circles, Monti DaFur advertises that the rescue package could secure EFSF breeders of the European Central Bank. The ECB had already bought massive Italian government papers in the summer of 2011, but the program then adjusted.

Jolt Covering got Monti of Spain, France and even from EU Merungs Commissioner Olli. The Finn, previously known as a gliber of the Liberal Market Dogmas, demanded "Experiencing decisions", To reduce interest rates of Italy and Spain. They will also be necessary. Because Spain must, if the spreads develop so on, will soon stretch the weapons and put a new auxiliary request in Brussel – this time for the essence of the whole country.

But a banking license for the ESM?

Shortly thereafter, the market was allowed Italy "testing". If in the end still has to capitulate Rome, the euro is in the end – because for two heavyweights such as Spain and Italy is simply not enough money in the rescue fund. Unless you secure the EFSF or. Soon the ESM new sources of funding, for example a banking license. Then he could receive unlimited loans from the ECB – the "bazooka", over the still last fall in vain was created, goods created.

And behold: even this topic is suddenly no more taboo. Hollande spoke to Dafur, Easter Kanzler Werner Faymann too. He called for the creation of a European debt balance fund and a banking license for the ESM. "Since you will need more steps. That will not be equal to the euro bonds, but it will be the repayment fund, it will be the banking concession", he said in Brussel. There had to be sufficient funding, "To protect the population that the eurozone breaks apart".

On the summit, other models were also discussed. Monti brought an automatic intervention of the Eurozone into the conversation as soon as the bond interest is a certain critical threshold. Finland recommended Italy and Spain to access Pfandbriefe, as Helsinki did successfully in the 90s.

But Merkel dear – at least at first – not soften. Italy KONNE yes an official assistant application. Then the EFSF was also able to buy Italian government bonds to noise the course and reduce interest rates. One should "Existing instruments" Intrain, instead of inventing new new, Chany Merkel Monti. It is "irresponsible", not to raise fulfillable expectations, diplomats pushed.

Whether this was the last word or if it comes to an intervention on the market, was initially open. It is clear that the hermetic German discourse was broken for the first time. At this EU summit was finally discussed on market failure and possible counterclaims. That the market "rational" and "efficient" act, as the neoliberal theory claims, and that they are "Discipline" from "School" Used, however, however, in Berlin Hort, did not dare to tell Merkel in Brussel.

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