“The ECB will channel liquidity from north to south to prevent fragmentation”…
So much for the technical and technocratic jargon.
You have to understand that the ECB will pass money from the north, which is very rich, to the south, which is very poor!
How will she do you tell me?
First we classify the countries by group. 3 groups.
The first are the rich.
The second is the middle class, neither poor nor rich, who will not be entitled to anything.
The third are the broke people who will have to be helped with the money from the first group, the rich.
In BCE language, this gives:
“The European Central Bank (ECB) will buy bonds issued by Italy, Spain, Portugal and Greece using the product of the German, French and Dutch debt maturities it holds in its portfolio, to limit the widening yield gaps between States, we learned from several sources.
The ECB must engage from Friday in this exercise of rebalancing “spreads” in order to prevent a financial fragmentation of the euro zone at a time when it is preparing to raise its key interest rates. And it plans to present on July 21 the terms of a new system developed for this purpose.
The central bank has therefore divided the 19 countries of the euro zone into three groups, the “donors”, the “recipients” and the “neutrals”, according to their size and the speed of the increase in their spread in recent years. weeks, explained several people Reuters spoke to at the ECB’s Annual Forum in Sintra, Portugal in recent days..
As there are pennies that are reimbursed to the ECB when bonds (credits granted) are reimbursed, the ECB will use these funds to buy back bonds from broke countries.
What is the composition of the groups?
“The composition of the three groups of countries, which will be reviewed each month, reflects the division between the “core” countries of the euro zone and the so-called “peripheral” countries which appeared in the early 2010s, during the debt crisis in the euro zone.
The recipients thus include countries considered by investors to be more risky due to the weight of their public debt or the weakness of their economy, namely Italy, Greece, Spain and Portugal, the sources said. Initially longer, the list was shortened by the Board of Governors, they added.
The group of donors includes half a dozen countries from the “heart” of the euro zone, including Germany, France and the Netherlands, according to these sources. »
Here, our country, which as everyone knows is awash in surpluses and money, will therefore end up supporting countries that have even less.
I said at the time of the ESM, the European Stability Mechanism, that it was the story of over-indebted countries which borrowed money they did not have to avoid bankruptcy from countries whose financial situation was simply irretrievably compromised.
We start again.
We will have fun.
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Source Boursorama.com here