This Cool Video is from the Financial Times. In the five minute video, two FT journalists, Ralph Atkins and Ferdinando Giugliano discuss the ECB’s decision to accelerate its asset purchase program. The discussion takes place shortly after the decision was announced.
Initially, they took the 60 bln euro program at face value. However, as has become clearer, the 60 bln euros includes the 10 bln euros of asset backed securities and covered bonds that are being purchased on a monthly basis. In addition, another 5 bln euros a month will be used to purchase European supra-national bonds, such as EU and EIB bonds. That leaves 45 bln euros for sovereign bonds and agencies (like KfW in Germany).
When the topic turned to structural reforms, it was even more revealing. Giugliano, who is Italian and previously a consultant to the Bank of Italy, took Italian reforms for granted, but questioned French commitment. What would a French reporter say? It is true some some labor reform legislation has been approved in Italy, but the implementation still faces many hurdles. In addition, Renzi the third consecutive un-elected Prime Minister, has had to resort to ruling by decree.
Greek elections on January 25 are unlikely to be conclusive. And before it is resolved, Italy’s presidential election may begin (January 29). Berlusconi and one-time ally Alfano (who serves as Interior Minister in the Renzi government) have joined forces again to support former defense secretary Martino, a member Berlusconi’s Forza Italia party. A week away from the first round of the selection process and Renzi has still not tipped his hand.
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