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Markets Exaggerating Euro Zone Risks - Ecb Policymakers

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http://uk.reuters.com/article/idUKTRE65A2KK20100611

Financial markets are exaggerating the risks to the euro zone, which is on an economic recovery path, and to the single currency, European Central Bank policymakers said on Friday.

The "really irresponsible" behaviour of credit rating agencies was compounding the problem, Executive Board member Juergen Stark said in a Reuters Insider Television panel discussion as he defended the ECB's controversial decision to buy government bonds.

"Markets are, clearly in the current circumstances overshooting, we do not deny that we have severe problems in the euro zone but they are less severe than market reaction suggests," he said.

Other ECB policymakers also came to the defence of the euro in appearances across Europe, where 16 countries share the common currency that came into being in January 1999.

The euro is poised to end the week 1.5 percent higher against the dollar, which would be its best weekly performance this year. But it has shed nearly 16 percent this year against major trading currencies, driven lower by fiscal worries.

"People have to understand that the euro is (here) to stay," Mario Draghi, head of Italy's central bank and a member of the ECB's rate-setting Governing Council, said in Helsinki.

In Venice, the ECB's Lorenzo Bini Smaghi said any defection from the euro would be "highly detrimental" for all concerned.

With the focus on the debt crisis that spilt out of Greece to rattle investor confidence in the broader currency area, the financial markets risked ignoring the fact that recovery was in train even if it remained modest, another ECB board member said.

"The growth outlook (in the euro zone) shows a much better performance but recovery is still not very strong," Gertrude Tumpel-Gugerell told reporters during a visit to Warsaw.

In Frankfurt, Stark said it was "crazy" to question whether the euro had a future and said there was no alternative to the single currency for Europeans.

"It is not a crisis of the euro, it is a crisis of sovereign debt. And this crisis is not limited to the euro," he said.

This is starting to sound like the football club chairman defending the manager of his team that keeps losing.

Still it's contained and I'm sure these great experts would never dream of making ramping statements. The Eurozone must be recovering and heading towards solid sustainable growth.

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In Frankfurt, Stark said it was "crazy" to question whether the euro had a future and said there was no alternative to the single currency for Europeans.

Resistance is futile... :lol:

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Resistance is futile... :lol:

The more they plead, the more we know they are really very worrried. It's the 'I AM ABSOLUTELY AT ONE WITH MY CHANCELLOR' quote, followed by a resignation and stab in the back. The debts are so huge they cannot be dealt with except by markets correcting substantially. End of story.

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http://uk.reuters.com/article/idUKTRE65A2KK20100611

This is starting to sound like the football club chairman defending the manager of his team that keeps losing.

Still it's contained and I'm sure these great experts would never dream of making ramping statements. The Eurozone must be recovering and heading towards solid sustainable growth.

Sorry, didn't they just reverse their policy of not buying bonds a day after they said they never would because of a serious imminent crisis?

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  • 260 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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