European Central Bank head Mario Draghi has unveiled his latest weapon in the fight to rescue the eurozone: unlimited buys of bonds from shaky European economies like Italy and Spain. The hope is that showing a deep-pocket, open-ended commitment to the euro will calm market jitters and lower borrowing costs that threaten to swamp a growing number of European countries.
But to be eligible for the programme, countries will have to meet strict budget guidelines, and Draghi warned governments that those who slack off could find themselves cut off from the ECB largesse. Already across Spain, citizens are protesting savage cuts to spending, arguing that if you choke an economy, you can't expect it to recover. If Spain takes ECB help, even more cuts for that country could be on their way.
And the move will do little for Ireland or Greece, which, under the terms of their EU bailouts, don't currently sell their bonds on the public market. Greeks, in particular, have little to cheer about. They're reeling under an austerity-driven unemployment rate of nearly 25% and the government recently announced further savage cuts to wages and pensions to meet the demands of its European creditors.
Even that may not be enough to appease the so-called troika: the European Central Bank, European commission and International Monetary Fund. News emerged last week that the troika is considering demanding that Greece impose a six-day working week as one of the conditions for receiving the latest batch of bailout money.
Read more: The Economist nails key question arising out of this: will Germany play ball?
Sources: BBC, Wall Street Journal, Financial Times, RTE, Ekathimerini, EU Observer, Economist