ECB crisis actions: The printing press perspective

Harold James, Professor of History and International Affairs and the Claude and Lore Kelly Professor of European Studies, Princeton University and Hans-Werner Sinn, Professor of Economics and Public Finance at the University of Munich. Cross posted from VoxEU

Karl Whelan, 9 June 2011In a recent Vox column, Hans Werner Sinn of the prestigious Institute for Economic Research claims that the German Bundesbank is effectively propping up banks across the Eurozone’s periphery. He adds that doing this risks a major crisis. Here, Karl Whelan of University College Dublin argues that Professor Sinn’s analysis is incorrect and that his policy prescriptions are extremely unhelpful and even dangerous. Full Article: Why Hans Werner Sinn is missing the target

In the New York Times, Hans-Werner Sinn of Germany's Ifo Institute for Economic Research argued that Greece has already received far more help than Germany received under the post-war Marshall Plan. In a guest post on Free Exchange, Albrecht Ritschl of the London School of Economics argued that it had not, to which Mr Sinn responded here.

George Soros: George Soros Comment On Hans-Werner Sinn: Hans-Werner Sinn has deliberately distorted and obfuscated my argument. I was arguing that the current state of integration within the eurozone is inadequate: the euro will work only if the bulk of the national debts are financed by Eurobonds and the banking system is regulated by institutions that create a level playing field within the eurozone.

The world’s largest central banks, including the U.S. Federal Reserve, the Bank of England and the Bank of Japan, are overseeing unprecedented easing programs. While the European Central Bank, unlike the BOJ or the Fed, has not purchased large amounts of sovereign debt, it could do so in the future by ramping up its Outright Monetary Transactions (OMT) program. That program allows the ECB to purchase sovereign government bonds on the secondary market, which would be expected to lower interest rates in the event of renewed turbulence in the euro zone.

Albrecht Ritschl is professor of economic history at the London School of Economics and a member of the advisory board to the German ministry of economics.