From today’s Open Europe news summary:
The FT reports that the ECB will press ahead with its plans to purchase Asset Backed Securities (ABS) despite both the French and German government rejecting the bank’s calls for them to provide public guarantees to the riskier tranches of ABS. Separately, speaking in Frankfurt yesterday, ECB Executive Board Member Yves Mersch said that, “The purchase of government bonds would raise substantial institutional, instrumental and legal questions.”
The European Monetary Union’s two biggest members are opposed to action by their central bank, yet the central bank will forge ahead with its asset buying plans anyway. This illustrates the insanity of majority vote at the board level of the European Central Bank and further illustrates the wisdom of Dr. Philipp Bagus’s revelation of the structural failures of the EMU in his 2011 book, The Tragedy of the Euro. Patrick Barron
