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European QE Postponed Indefinitely? Leaked EU Draft Shows "Lack Of Political Cover" For Draghi
One of the biggest wildcards for 2015 has been whether or not the ECB would proceed with US-style, "public debt" QE (considering the private QE has gone absolutely nowhere fast with just €21.5 billion in ABS and covered bonds monetized in the past few months) over both the objections of Germany and, increasingly, the ECB's governing council itself. Recall that it was just last week when Germany's Die Welt reported that, in a stunning turn of events, Draghi lost the majority vote on the ECB executive board when Benoit Coeure joined Sabine Lautenschlager and Yves Mersch in the "no" camp.
Today things for the former Goldman banker went from bad to worse, when as the FT reports, the ECB lost its "normal political cover" to make a bold decision, in fact the boldest decision in the ECB's history: one which could lead to a political and legal retaliation by Germany itself. The reason, as FT's Peter Spiegel explains, is that unlike previously when EU summits resulted in "greenlighting" blueprints which, if only on paper, enabled Draghi to proceed unconstrained, this time there was no such blank check compact.
Back in October at a eurozone summit, Draghi was able to get a little-noticed statement out of the assembled leaders committing them to another “Four Presidents Report”, a reference to the blueprint delivered in 2012 that set a path towards further centralisation of eurozone economic policy. The report helped kick-start the EU’s just-completed “banking union.”
Progress on that 2012 blueprint has since stalled, however, and at his last summit press conference, then-European Council president Herman Van Rompuy said the new “Four Presidents Report” would be delivered at the December EU summit, which starts next Thursday. Many in Brussels saw this as the quid for Draghi’s quo – once the leaders agreed to another blueprint for eurozone integration, Draghi would have a free hand to launch QE.
But according to a leaked draft of the communiqué for next week’s summit, Draghi may have to deliver his quo without a eurozone quid. The text makes clear that leaders have no intention of delivering a new blueprint any time soon.
What's worse is that instead of merely leaving the bogey hanging, the draft actually put a time-period on the political limbo that the ECB will suddenly find itself under: "According to the draft, a debate on how to proceed will be pushed off until February, and the report itself will come no sooner than June. Here’s the relevant paragraph from the current draft, sent around to national capitals on Monday:"
Closer coordination of economic policies is essential to ensure the smooth functioning of Economic and Monetary Union. Work on the development of concrete mechanisms for stronger economic policy coordination, convergence and solidarity is being taken forward. Heads of State or Government will exchange views on these matters at their informal meeting in February. The President of the Commission, in close cooperation with the President of the Euro Summit, the President of the Eurogroup and the President of the European Central Bank, will report at the latest to the June 2015 European Council.
The bottom line, as Spiegel concludes, is that "Draghi won’t have the normal political cover he needs to make a bold decision early next year – a problem only compounded by the European Commission’s decision last month to put off the day of reckoning for France and Italy over whether they will face sanctions for failing to live up to the EU’s crisis-era budget rules."
So with every bank praying to their Keynesian gods, and, of course, the ECB's money printer which will be oh so very critical with the Fed out - at least indefinitely - did the world's capital markets just get the worst possible news, namely that at least until the summer of 2015 the world will be reliant only on Japan's Abenomics, which as most already know, has succeeded in only pushing Japan into a near-depressionary quadruple dip, and where the political capital of the prime minister can now be counted on one hand.
And with the ECB's hands tied, what happens to the world's biggest equity bubble if and when Japan's population finally realizes it has had enough of unprecedented inflation coupled with wage deflation, and gets rid of Abe for the second and final time? Suddenly, what seemed like a distantly hypothetical "worst-case" scenario is looking all too realistic.
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I'm waiting for the day when the FED follow OPEC's lead and says, "fuck it lets see where the markets settle"
hahahahahahahahahahahhahaha
Fuck you Mario Draghi you Calzone fressen cunt.
EU is (French) toast.
They should hire Krugman as a consultant as to how to accelerate their decline, as Japan has done.
If Draghi thought he had the backing needed for Euro-QE, good chance he'd have done it by now (and Paul Krugman would be on the Red-Eye directly from Tokyo to Brussels as we speak).
Mr. Yellen is still active in the shadows with QENOCU.
Now, only insiders know when, what, and how much is monetized, because what is a little front-running between friends.
activities, and member-bank ownership to independent audit and open
access to the public via real-time internet portal
SHIRLEY YOU JEST!
That will NEVER happen!
The Feral Reserve will declare itself insolvent soon and say
"So long and thanks for all the fish!"
https://www.youtube.com/watch?v=jc6aufHz-i0
"Lack of Political Cover" my ass.
More like Lack of Principles
I was just studying your Avatar, which tends to amaze me; when I thought, that's almost a perfect metaphore for what it is to be the ECB, today. Painful, useless, and doomed.
Wheres the usual arsehole picture of you murdering your cow for dinner?
no you left out China, and whatever ""Belgium"" is doing on the sly...
Let's not have any "comments" about Belgium; now. Brave little Belgium is selling a lot of waffles, that's how they can afford all those Bonds; more power to them.
Thank God the EU is over! I am from Europe and I approve this message. Ditch the monster from Bruxelles, and next NATO in the funk.
Yes, you've got the right answer, alright. The EU was a perfect case of human stupidity; don't have enough problems ? Make some more Government !!
How dare you undermine my existence?! Feel the wrath of Mario the Draghi!!!1
Com'on, guys; they're just "Euros"; print another bushel full for Italy and Spain; they really are European, you know.
Tic Tock, Tic Tock!
OUCH! that'll leave a mark. Can you say too much Kraut on my hot dog
they must print or die
Or both. Which is looking increasingly likely.
"And believe me, it will be enough!"
Do whatever it takes *NOT TO DO QE*
All according to plan ... bwahahahaha ...
Don't believe for a second that Draghi could not purchase all of the cover he wanted from corrupt parasitic politicians.
The order to pull the plug is part of the original plan coming from a higher (or lower) source. Doing Adonai's work, indeed.
ECB has no choice but to proceed with QE
I know. People keep saying that. I've said it myself many times. It seems almost inconceivable that there would be a modern central bank that would refrain from outright monetization simply because some moldy old rule book says they aren't allowed. But that's Europe for you, apparently.
There is no Europe; there's Germany...and a bunch of pissant broke vassals.
Germany actually won that world war.
Israel actually won that war, fixed it for ya....
I prefer to say they lost the War, and won the Peace, but the Peace lasts longer. but there's a lot to what you say.
All this means is that they still need to manufacture appropriate "political cover."
In other news, it appears the latest flying banker had a fairly high profile.
http://www.dailymail.co.uk/news/article-2868442/Bravo-reality-TV-star-s-...
Still no details as to how he managed to fall. All we know is that it's not "suspicious."
"Move along, nothing to see here..."
I've got big balls
Oh I've got big balls
And they're such big balls
Dirty big balls
And he's got big balls
And she's got big balls
(But we've got the biggest balls of them all)
Seems Mario just took the on ramp for the Highway to Hell.
pods
Dirty deeds done dirt cheap.
no surprise
until i hear germany on board
jawbone and QE-lite all we'll get
German bund yields so low is bet on germany leaving euro
Germany would leave the Euro yesterday, if the German people could just get a chance to vote on it; but their politicians are careful that doesn't happen.
Mario wants to do it, but senses he doesn't have enough politician stooges to take the nailgunnings and magical invisible knife attacks for him. Fucking pussy.
And his breast stroke isnt good enough to make the channel.
LOL.
They will print.....but at the same time say they won't
I won't come in your mouth, I promise
What ? Schäuble begging Putin for a LOAN extension ?
Ukraine running out of money: Schäuble having to ask Russia for leniency
German Economic News | Published: 12/10/14 15:33 clock | 44 Comments
The IMF has discovered in Ukraine a new $ 15 billion hole. Premier Yatsenyuk admits that Kiev can no longer pay it's army. German Finance Minister Schaeuble said to have asked Russia not to make a 3-billion-dollar loan due. The EU wants to "help" with new loans. But it is in Brussels now clear that one can not raise as much money.
http://deutsche-wirtschafts-nachrichten.de/2014/12/10/ukraine-vor-der-in...
Probably handed over the keys to Putin.
Its all over. The only question is how many other Balkan countries will go East.
Its all about finding your new sugar daddy from now on.
Similarly, will Spain and Portugal team up with Italy and Vatican ? Will Greece go to Turkey or Italy ?
These should be interesting RISKy times. Countries in motion.
I hate when I get to the end of balancing my checkbook and there's a $15 billion shortfall.
So... all they need to do is to get rid of the army and let NATO take over the bases.
WIN-WIN!!!!!
FFS. You really couldn't make this garbage up, could you?
Ukraine is broke and it can't pay its soldiers.
So Hr. Schaueble suggests that Russia shows some leniency on Ukraine debt so that Kiev can continue to terrorise ethnic Russians via the Ukraine army.
The news flash is the News believes CB Chairs can make decisions without their puppet masters.
mini-Mario.
Can Mike Meyers whip up something pronto ?
There are no "EU Budget rules" -- there are only "Goldman's Rules" that the EU MUST follow!
Only political cover I'd like to see Draghi have is a dirt blanket.
Yawohl, mein Oberst !
The French and Italians will default before they cut back on their government and rents. So the Germans can take a default or inflation. So look for some heat this summer in europe.
France will print, Itaily will print, Germans will cry foul and the farce will go on, untill Germany leaves the euro.
Italy will leave first, their industry is getting oblirated.
They make imitation 1890 Guns and Fiats; what could go wrong ?
Don't worry, it's just another bluff by Draghi.
Mario Draghi.
A man who would do "whatever it takes" with his big bazooka now transformed into an emperor with no clothes shooting blanks...just a Goldman Sachs snake oil salesman being found wanting.
"being found wanting"
That's a good start.
In a Communist system......QE is the norm.....wake up sleepy time over
1945 British National Archives Document Calls For New World Order Now
IMF Welcomes Bank of Japan’s Increased QE…….Of Course Debt For Everybody
US and China Central Banks Tighten in Unison
Russian Bank Hires Two Former Senators
and more.....http://newworldorderg20.wordpress.com
Oh no you tell me that ex brokers lie and cheat
European economies are deflating quickly. No amount of QE is going to stop the bleeding. Everyone knows it but no one will admit it... yet.
http://www.globaldeflationnews.com/as-early-as-2011-ewis-analysis-warned...
the goal of 95% unemployment has not yet been reached.
maybe people would just give themselves a job if the ECB threatened to dispatch bankers to start raping and killing people and chopping them up and stuffing them in stuitcases - ?
to know where these NWO bankers are headed, start thinking like a serial killer.
http://www.dailymail.co.uk/news/article-2818968/Banker-booked-prostitute...
Draghi has no cash and has no legal authority for access to cash - Draghi is a lame duck - Merkel runs the show
But only as long as she chooses to. Germany is still reluctant to openly wield the big stick.
I'm still reminded of a recent wash post article regards to plunging oil prices by Saudi Arabia.
"Although falling oil prices lower inflation, the Federal Reserve tends to view that as a fleeting effect that would not alter its underlying judgments about policy. Nonetheless, Dudley said, “the slump in oil prices may also help to persuade” the European and Japanese central banks to implement further monetary easing as prices remain subdued."
http://www.washingtonpost.com/business/economy/as-oil-prices-plunge-wide...
ECB President Mario Draghi's last move towards more QE is no more than stupidity on steroids, even words like misdirected and boneheaded do it a disservice. This is more proof that the Euro-zone is in big trouble, both the union and the flawed currency is again begging to crumble.
One is forced to wonder if Japan and the Yen will crash first considering how each day Japan slides closer to the economic abyss or whether the Euro will lead the way into the wastebasket. Draghi has helped the countries of Europe kick the can down the road but this only delays the failure on the Euro. More on how the Euro-zone has failed to make any real reforms in the article below.
http://brucewilds.blogspot.com/2014/09/euro-zone-and-draghi-both-mired-i...