Ours british allies *
IMF-EU loan in doubt after Britain refuses to lend £25bn
One trillion euros baby
Klaas Knot, head of the Dutch Central Bank and an ECB board member, suggested that it was European leaders who need to make the next move. He said that the debt crisis could be solved if the euro zone would boost its financial rescue fund to €1 trillion.
There were, however, at least a couple of bright spots this week. For one, a Spanish bond offering came off much better than expected, with interest rates down over recent weeks. And Russia has indicated a willingness to pay €10 billion into an International Monetary Fund plan to prop up the euro. Weidmann had threatened not to participate if there was no help from outside of the euro zone. spiegel
Divisions in eurozone over ECB bond-buying
In the interview he said: “It is the fundamental arrangement of this currency union that it does not allow the monetary funding of sovereign debt by the ECB. Without these rules, there would be no economic and currency union.”
So far the ECB has bought €210bn (£176bn) of state debt. The controversial move has been supported by the UK, France and the USA, but opposed by Germany. The reasons behind Mr Stark’s resignation go some way to revealing how deep the opposition to monetary intervention runs.
However, he added: “It’s the immediate crisis that must be addressed. That means a credible plan for the bond markets on the risks of sovereign insolvency.
“Institutional reform may or may not help for the longer term, but it won’t alleviate the immediate crisis. If not addressed, it has the potential to provoke a crisis of Western capitalism.” telegraph
Note: The End of the History?