As eurozone leaders return to work, worries resurface
Kai Ryssdal: Remember the European debt crisis? Yeah, didn’t think you did.
There’s been something of a summertime lull over there. Sad to say, though — vacation’s almost over. And as Marketplace’s Stephen Beard is about to tell us, any hope the crisis dissipated while we weren’t paying attention is sadly misplaced.
Stephen Beard: At least they had a carefree August on the beach. Eurozone leaders could relax. Markets were becalmed. Reassuringly, the European Central Bank was working on a plan to stop that nasty debt crisis.
But, says fund manager Julian Pendock, the lazy, hazy days of summer are coming to an end.
Julian Pendock: Traditonally, September and October always bumpy months. I think a lot of people are getting a little bit nervous.
And specifically about that plan which seemed so reassuring on the beach, the European Central Bank wants to wade into the market and buy vast quantities of Spanish and Italian government bonds. But there’s a cloud on the horizon. The German Central Bank — the Bundesbank — is vehemently opposed.
And that, says Frankfurt based analyst Stefan Schneider, probably means that most Germans will oppose it too.
Stefan Schneider: Many people in Germany believe in God but all of the Germans believe in the Bundesbank so one shouldn’t underestimate the power the Bundesbank has in shaping the German public opinion.
So when the European Central Bank unveils its plan next week, it may well be without full German support. Sonny Kapoor of the Redefine think tank says don’t expect a convincing raft of euro-saving measures.
Sonny Kapoor: These will not be enough by any stretch of the imagination to stem the euro crisis once and for all. I’m afraid we’re stuck with the euro crisis in the news for the foreseeable future.
In other words, he says the summer will be over. And the debt crisis will draw in and darken the markets again.
In London, I’m Stephen Beard for Marketplace.
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