The ECB Cannot Cure Causes Of Eurozone Crisis

A recent Free exchange column discusses the European Central Bank's troubles in providing support to peripheral economies (summary here). We are inviting experts in the field to comment on the piece and related research.

Like a never ending game of "Ring-Around-the-Rosie", European leaders switch from one poor funding idea, to another, to another, around in an endless circle of dead-end propositions then back where they started. The "posie" is now back in the IMF's pocket.

The German Constitutional Court in Karlsruhe, heard arguments on Tuesday on whether ECB measures to contain the eurozone crisis violate German law. The court does not have the power to block the ECB, but it does have the power to restrict German participation in various funding schemes. The New York Times dramatically states German Court Debates Fate of Euro.

FRANKFURT — The European Central Bank kept interest rates on hold on Thursday, waiting to see if a recession-hit economy perks up and whether an aggressive policy move by the Bank of Japan helps the eurozone. Investors’ attention will now shift to ECB President Mario Draghi’s news conference later this morning for any signals about the bank’s preparedness to lower borrowing costs for the 17-country eurozone in the coming months.

FRANKFURT — The eurozone crisis is not over, France’s reforms are slipping and the Bundesbank has set aside billions in new provisions against what it sees as risky European Central Bank moves, Germany’s central bank said on Tuesday. Presenting Bundesbank 2012 results that showed a sharp increase in its risk provisions, the German central bank’s chief, Jens Weidmann, urged governments to tackle the roots of their troubles with reforms.