31 January 2012

The Wrong Treaty

So the summit succeeded in agreeing a new EU treaty. I have one question. Of the 27 European leaders in the room was there not one who proposed to change the treaty to allow the ECB to buy government bonds directly from their treasuries?

Mr Draghi constantly points out that it is the Lisbon treaty which prevents the ECB acting as lender of last resort. Not only might removing this obstacle have been a reasonable quid pro quo for the restriction on fiscal freedom, it would deal directly with the crisis unlike the treaty agreed which will do nothing to ease the Euro's problems.

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