Draghi’s Day One at ECB Blighted as Greece Faces Referendum |
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November 2nd, 2011
Nov. 1 (Bloomberg) -- Mario Draghi’s first day as head of the European Central Bank was blighted by George Papandreou. Italian bonds slid and the risk premium between German debt and the rest of the euro area increased after the Greek prime minister announced late yesterday he will hold a referendum on the terms of his country’s bailout.
Nov. 1 (Bloomberg) -- Mario Draghi’s first day as head of the European Central Bank was blighted by George Papandreou.
Italian bonds slid and the risk premium between German debt and the rest of the euro area increased after the Greek prime minister announced late yesterday he will hold a referendum on the terms of his country’s bailout.
Papandreou’s gambit, hours before Draghi succeeded Jean- Claude Trichet, exposed the political pitfalls in the fight to keep the euro from blowing apart and adds to the pressure on the ECB to keep buying distressed bonds. An ultimate rejection of the rescue deal by the Greek electorate would threaten a default in Athens and a plunge in Italian and Spanish debt that may require the central bank to consider an unlimited guarantee of all euro-region bonds.
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