http://www.independent.ie/business/european/market-rout-as-ecb-dashes-bond-hopes-2959300.html
Mario Draghi's sensational comments from last night, pretty much explode the notion that the proposed Fiscal Union will be enough to entice the ECB to ease the monetary situation. Even though he delivered a rate cut last night, as well as promising liquidity to banks, it seems the ECB is far from opening up the flood gates of liquidity.
I cannot blame them for their scepticism. Even if this deal was agreed and followed, it does nothing to prevent private asset bubbles occuring in future and requiring further Central Bank interventions. They do not think this fiscal Union will prevent further crises and they are right.
Nonetheless, I think the ECB is interpreting their mandate extremely narrowly when they think they can simply stand idly by as the Euro literally crumbles in front of them. They may be charged with safeguarding price stability, but how true are they to their mandate if they cause the Euro to collapse?
Quantitative Easing is desperately needed in the Euro Area, and the sooner the ECB begins to take responsibility for maintaining the currency, rather than simply price stability -the better for everyone. Yes, this fiscal union is a farce -but how does that change anything?
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