Eurozone allows stabilization fund to inject capital into private banks: Spain, Italy and France win partial victory

After late night negotiations it has been decided to permit the European stability fund to purchase directly the assets offered by banks in Spain and and Italian sovereign bonds and by so doing permit European funds to be injected directly into ailing Spanish banks thereby reducing the burden of potential sovereign debt for which Spain is responsible. As the Italian Prime Minister Mario Monti explained there will still be conditionality, meaning the countries affected will have to meet eurozone objectives on debt reduction and timetables but it will not as strict as was imposed upon Greece. This is, along with moving toward better regulation of the banks, an improvement over the original German strict austerity position which forbid the ECB and the stability fund from buying sovereign debt. But in the absence of a major stimulus package – the 140 billion euro package that is being spoken about is far too small to accomplish much – there is still a long way to travel to rescue Europe from a recession and continued high unemployment. Nevertheless, it appears to be a small step in the right direction.

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About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, deficit hysteria, deficits and debt, European debt crisis, European financial stability fund, European unemployment, France politics+economy, Greek sovereign debt crisis, quantitative easing, Spain, Uncategorized. Bookmark the permalink.

One Response to Eurozone allows stabilization fund to inject capital into private banks: Spain, Italy and France win partial victory

  1. romain cansaran says:

    Hi Professor Chorney I’m ROmain Cansaran and I had contacted you two weeks ago about a reference letter for my application to the London School of Business and Finance in International Business. I am contacting you to ask you if you had received the email I had sent you with the questionnaire that you have to fill in for the school as the deadline was the end of this month. So please if you get this before tomorrow I have sent you the full form at chorney@alcor.concordia.ca but tell me if you want to get it on another email address.
    Thank you Professor.

    Regards

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