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Wirtschaftswoche Continues Attack on ECB and Banque de France, Questions Currency Union
10 January 2013
(EIRNS) — The Welt am Sonntag exposé on the ECB’s money-pumping STEP mechanism from Jan. 6 continues to draw blood. Yesterday, Wirtschaftswoche columnist Frank Doll had a lengthy article on the Banque de France as "éminence grise" behind the ECB, pointing both to the inflationary dynamic behind this scheme and the impossibility of keeping the monetary union under these nontransparent circumstances. After all, this "shadow market for central bank money" amounts to EU445 billion, of which the major French banks control almost 43% and are thus the main benefactors. So, there can no longer be any talk about the European Central Bank having sole control over monetary policy in the Eurozone, as it is supposed to have. Also, art. 105 of the Maastricht Treaty is pushed aside, according to which the main task of the ECB is to guarantee price stability. Since the euro crisis, "monetary policy has become a part of EU economic policy," the author says. His conclusion: "The STEP scandal might finally ruin the already beleaguered credibility of the ECB. Also in Berlin, inevitably, the question will have to be posed, whether it is possible to continue participating in such a currency union. At least one should very carefully consider whether to leave banking supervision to a central bank that is not able to keep its own house in order — or does not want to do so." In the first part of the article, the author targets the overall "monetary breakdown of the ECB," which appears in various forms, including in the failure to sterilize additional central bank money, which is generated through the Securities Markets program (SMP). In the last days of 2012, a weekly allotment could not be realized on the markets. Even this may seem like a minor event; the last time something like that happened was in November 2011, after which the international central banks started a coordinated bailout. In Europe this included longer-term refinancing deals, LTROs. The ECB then pumped about EU1,000 billion into the European banks. "Will there be after LTRO 1 and LTRO 2 now with LTRO 3 the next biggest liquidity injection for the banks?" he asks. Again, hyperinflation. It is left to the BüSo to insist on the only solution: Glass-Steagall. [EFI] http://www.wiwo.de/politik/europ/ba... |