The camp predicting that the European Central Bank will soon cut rates is growing. Economists at Citi, Morgan Stanley, BNP Paribas, Crédit Agricole, Credit Suisse, and a few other shops think the ECB will pull the trigger on Thursday, announcing a cut to its benchmark refinancing rate — which currently stands at 0.25% — by either 10 or 15 basis points.
Inquiring minds are reading "Towards a Genuine Economic and Monetary Union" by the gang of four nannycrats: European commission president Herman Van Rompuy, ECB president Mario Draghi, José Manuel Barroso of the
European commission, and Jean-Claude Juncker, the leader of the 17-country
Don't expect any details. There aren't any. Instead the document consists of a wish list wrapped in a wordy package that says virtually nothing.
The EU Crisis went into overdrive in the spring of 2012 when the Spanish banking system as a whole nearly collapsed. Having pumped €1 trillion into EU banks via its LTRO 1 and LTRO 2 programs in December 2011 and February 2012, the European Central Bank found itself facing a problem far greater than Greece (Spain’s banking system is over €3.7 trillion assets in size, compared to Greece’s €338 billion) and on the verge of losing control of the entire system.