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by Simon Kennedy and James E. Neuger, Bloomberg BusinessWeek
Published by DAN CALLOWAY
Editor in chief, LHAW
Dec. 9 (Bloomberg) -- European leaders’ blueprint for a closer fiscal union to save their single currency left the onus on central bankers to address investor concerns that Italy and Spain can keep paying their bills.![]()
While European Central Bank President Mario Draghi hailed the accord struck at all-night talks in Brussels, investors called for him to expand his crisis-fighting arsenal to ensure debt-addled nations can pay their bills. The ECB was said to be purchasing the bonds of Italy today as they and Spain’s fell.
“The leaders have now defined the end point they want to reach in terms of fiscal governance, but it’s a long way to go there,” Thomas Mayer, London-based chief economist at Deutsche Bank AG, told Bloomberg Television. “We’ll probably see more near-term tension and that will probably then trigger a more hands-on intervention by the ECB.”
Nineteen months to the day since leaders first met and ultimately failed to contain the debt turmoil, their fifth comprehensive effort added 200 billion euros ($267 billion) to the warchest and tightened rules to curb future debts. They sped the start of a 500 billion-euro rescue fund to next year and dropped a demand that bondholders shoulder losses in rescues.




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