Tuesday, October 23, 2012

Does the Bundesbank Want Out of the Euro?

Paul de Grauwe, who is as prominent an expert on European political economy as there is, speculates that the Bundesbank opposes the ECB's outright monetary transactions (OMT), without which there is no salvation for the euro, because it, the Bundesbank, has always opposed the euro project and is trying to lay the groundwork for a German exit, after which the Bundesbank would again be primus inter pares among European central banks, rather than a handmaiden of the ECB.

1 comment:

PF said...

Yes, there are probably some at the Bundesbank who actually sincerely oppose the entire euro project, but the ECB and the Bundesbank also have a mutual interest in playing out a "good-cop/bad-cop" two-step, in order to present a constrained set of negotiating parameters to the imperiled debtor countries. It's overdetermined and hard to say what the Bundesbank "really" believes.