ECB warned Italy last weekend that it would stop buying its bonds if it won’t pass required reforms of Italian budget to get Italian debt under control, said Yves Mersch a member of a bank governors board. Currently ECB is buying Italian bonds to slow down rates and prevent them from skyrocketing. Although ECB’s interventions the Italian bond rates reached almost 7% today.
ECB ended buyouts of bad bonds of the countries suffering with debt crisis some time ago, however due to worsened debt situation it was forced to start buying bonds back. In last few months ECB has bought bonds for 100 billions Euro. Main portion of bought bonds were Italian. “When we see our interventions sabotaged by the lack of effort of the national governments, then we ask ourselves if those interventions can provide the required improvement” as cited by Italian newspaper La Stampa.
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I’m really loving your blog about stock investing!
Italy will end up as Greece. They will bankrupt. Great insight on European debt crisis and how to trade stocks in this mess.