Make it official calming purchases by the ECB or the new ESM bailout fund on the secondary market of national bonds when the spread of the various countries exceeds a certain alarm threshold. This is the idea being discussed in the European "grand negotiation" to deal with the financial market crisis. This was confirmed by the Italian Minister for Community Policies Enzo, Moavero Milanesi: "It is an ongoing reflection that involves governments and central banks - he said -, it is only an idea, a definite proposal for a mechanism does not yet exist".
The fact that the subject is being discussed in these decisive days of preparation for the EU summit at the end of the month does not mean that it will be accepted or that it will remain among the possible options for the next few years. In any case, in the next few days the idea should materialize in something written that will begin to circulate among the capitals. According to the minister, we cannot yet speak of a defined plan, but only of hypotheses still in formation.
“The problem is how to deal with the divergence in the spreads on the bonds of some countries in difficulty compared to German bonds within the monetary union – explained Moavero Milanesi -. The idea is of an intervention mechanism that is triggered when the gap between the spreads widens excessively with heavy repercussions” on the States. The proposal was drawn up by Italy and talks about it began bilaterally, first of all with the Italian-French meetings at the highest levels.
However, a grid of spread values beyond which European intervention would take place would call into question a basic principle (moreover written in the EU Treaty): the independence of the European Central Bank.
