№258. Agreement needed on liquidity provision to restore confidence in the eurozone
№258. Agreement needed on liquidity provision to restore confidence in the eurozone

Author(s): Stefano Micossi
Subject(s): National Economy, Governance, Economic policy, Government/Political systems, Financial Markets
Published by: CEPS Centre for European Policy Studies
Keywords: liquidity provision; Eurozone; Reform policies; Stronger economic governance;
Summary/Abstract: Some eighteen months after the first Greek rescue (May 2010), there is little doubt that the multiple attempts at crisis management in the eurozone have failed to restore confidence. Indeed, following each round of emergency measures agreed by the eurozone summits, matters have turned for the worse (see Figure 1 for the widening spreads, over the German Bund, for sovereign borrowing in the eurozone). At the time of writing, contagion has spread beyond Spain and Italy to the core sovereigns, with France close to losing its triple A rating and even Germany experiencing partial failure in a Bund auction on November 23rd.

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