More evidence that financial markets imposed excessive austerity in the Eurozone
More evidence that financial markets imposed excessive austerity in the Eurozone
Author(s): Paul De Grauwe, Yuemei Ji
Subject(s): Economic policy, Financial Markets
Published by: CEPS Centre for European Policy Studies
Keywords: Euro-Bonds; public debt;
Summary/Abstract: The decision by the ECB in 2012 to commit itself to unlimited support of the government bond markets was a game changer in the eurozone crisis. It had dramatic effects. By taking away the intense existential fears that the collapse of the eurozone was imminent, the ECB’s lender-of-last-resort commitment pacified government bond markets and led to a strong decline in the spreads of the eurozone countries.
Series: CEPS Commentary
- Page Count: 5
- Publication Year: 2013
- Language: English
- Content File-PDF