ECB bond-buying plan will only bide time
Mario Draghi, President of the European Central Bank (ECB), addresses the media following a meeting with the ECB's council in Frankfurt am Main, western Germany, on Sept. 6, 2012.
The European Central Bank has unveiled its plan to save the euro. The bank's president Mario Draghi said this morning that the ECB will buy European government bonds in an effort to stem the debt crisis.
In this plan, they're going to buy up European bonds -- probably from troubled countries -- but the countries have to ask first. Basically, they're hoping that will help the countries when the markets turn against them, which happens very often.
The stock markets are reacting pretty well so far, but don't expect all of Europe's problems to be magically solved.
"The problem that Europe has is too much debt and not enough growth, and buying bonds does nothing to cure that," said Peter Boockvar, a portfolio manager at Miller Tabak. "All it does is bide time."
Germany's already expressed opposition to this bond-buying plan, because it wants the European countries to feel the pain instead of getting a bailout. But that mindset is also what drove a country like Greece practically into a riot this summer.