Fitch: ECB Must Do More To Avert Euro Collapse!
- What we are getting from the MSM are largely political theatre. The plan is to collapse the Euro. We are simply in the stages building up to that eventuality.
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ECB must do more to avert euro collapse: Fitch!
By Marc Jones
FRANKFURT (Reuters) – The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a “cataclysmic” collapse of the euro, David Riley, the head of sovereign ratings for Fitch, said on Wednesday.
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Speaking to investors as part of a European roadshow, Riley said a collapse of the euro would be disastrous for the global economy, and while it is not Fitch’s baseline scenario, it could happen if Italy did not find a way out of its debt problems. “The end of the euro would be cataclysmic. The euro is a reserve currency,” Riley said. “What would that do in terms of financial and political stability?”
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“It is hard to believe the euro will survive if Italy does not make it through,” he said, adding that while many saw Italy as too politically and economically important to be allowed to fail, “one might also argue that it is too big to rescue.” The warning pushed the euro down towards a 16-month low versus the dollar.
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Riley urged the European Central Bank to abandon its current reluctance to scaling up its purchases of troubled euro zone debt such as Italy’s and drop its resistance to the bloc’s bailout fund, the EFSF, borrowing directly from it.
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“Can the euro be saved without more active engagement from the ECB? Quite frankly we think no,” Riley said, adding that the bank had plenty of scope to expand its balance sheet without unleashing a wave of inflation across the euro zone.
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“Why not have the ECB come out and say ‘We are going to cap interest rates’, say ‘We are not going to allow interest rates to exceed 7 percent’ or whatever level they see is the limit?.. Why not turn the EFSF into a bank so it can borrow from the ECB so it doesn’t have to go to the market?”
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… for more click here!
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