The disempowerment of markets in the euro area — Dirk Ehnts

The ECB is aware of its role and is ready to play it:

“The Governing Council will do everything necessary within its mandate.”This is the end of financial markets’ power over national governments. This is a very positive development that makes a repeat of the austerity policy after the financial crisis at least less likely.

The other problem that countries see is the Commission’s deficit limits. However, these have been suspended for the time being. It is up to politicians to adjust these two parameters – the stabilisation of the ECB’s PEPP and the abrogation of the deficit limits.

We urgently need a broad public discourse on these issues to ensure that market fundamentalists do not turn the wheel back again.

econoblog 101

The disempowerment of markets in the euro area
Dirk Ehnts | Lecturer at Bard College Berlin, research assistant at the Technical University of Chemnitz, and spokesperson of the board of Pufendorf-Gesellschaft eV in Berlin