ECB bond-buying plan will only bide time
Share Now on:
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.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.
Thank you to our Marketplace Investors!
Your generosity keeps nonprofit journalism strong, now more