- Italian public finances are rapidly becoming unsustainable without the ECB buying large quantities of its debt, the Merkel/Macron plan is no alternative.
- Without ECB buying large quantities of Italian debt, the eurozone would implode, which is the last thing the world economy needs right now.
- But the ECB is hamstrung by internal divisions and a damning ruling from the German Constitutional Court.
- Surprisingly, this situation actually leads to some euro strength.
- But the underlying tensions and fragility of the system very much remain, so we wouldn’t get too comfortable with that.
Surprising Euro Strength
June 7th, 2020 · No Comments