The intervention of the European Central Bank in the sovereign debt market is a mere "palliative" according to some Portuguese analysts. The purchase of Italian and Spanish bonds is almost an obstacle to making more important decisions to combat the ineffectiveness of the current long-term measures. "The intervention is too aggressive and these strong measures are not sustainable in the medium term," said Pedro Lino, the president of the consultancy.
Lino refers to the ECB's weekend announcement to “actively implement” a sovereign bond purchase program in the secondary market. That is, buy Italian and Spanish government bonds.
“If the European Union does not compromise with medium-term economic and fiscal policies – believes the analyst – any intervention will only have a momentary effect on the market”. For thisWhat is needed is a "structural change" in European economic policy. It is necessary to find a "new stability and growth plan (PEC) that has a time horizon of at least two years", instead of actions according to the "electoral calendar", said Pedro Lino.
This opinion is equally shared by Filipe Garcia, managing director of Information on Financial Markets (IMF), leader in financial consultancy in the Portuguese country, according to whom "the ECB's recent interventions in the secondary debt market have been nothing more than a palliative and they haven't solved the underlying problem." In the short term, the intervention of the Central Bank "calms the markets, but does not reduce the pressure on the Eurozone and does not even prevent the deterioration of the financing conditions of the other issuers of the countries in question, other than the States".
Also according to Pedro Lino, the extraordinary measures of the ECB and the actions of the European Fund for Financial Stability (FESF), "do not solve anything, they are just a momentary relief in the sentiment of the markets". Faced with this scenario, Filipe Garcia argues that "only the rapid implementation of the decisions of the July 21 summit and the assumption of a path towards financial or informal federalism could reduce pressure on the euro area". But the economist acknowledges that the bureaucratic times in Brussels "are not compatible with those of economies and markets", so "only the ECB at this point can do something".
Source: economic.sapo
