By resigning from the ECB, Juergen Stark has conveyed, deliberately or not, the message that there will be no such lender of last resort, that there isn’t enough political cohesion in the eurozone to stand behind countries under market attack. And this translates directly into soaring spreads for Spain and Italy; the self-fulfilling crisis is on.
Saturday, September 10, 2011
Endgame for the Euro?
Paul Krugman hopes not, but he thinks that Jürgen Stark's departure from the ECB may trigger a self-fulfilling doom: