ECB is leading Ireland and the eurozone to disaster
Moralising lectures about fiscal policy and austerity will not resolve the European banking crisis, writes Colm McCarthy
Published 01/05/2011 | 05:00
The EU Council, the Commission and the European Central Bank have made substantial progress in preparing new oversight and supervisory arrangements, a permanent rescue fund and arrangements for better scrutiny of public finances. All of this is designed to prevent Europe's next financial crisis. However, they have been doing a less impressive job in handling the current crisis, which is now in its third year.
Yields on Greek government bonds have reached stratospheric levels, implying that the markets regard a Greek default as a virtual certainty.
Both Irish and Portuguese yields suggest that the markets also see very high default probabilities in these countries.