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On July 30, Der Spiegel headlined "ECB Divided over Efforts to Save Euro," saying:
Analysts called Draghi promising to do "whatever it takes to preserve the euro" another "platitude coming from a politician." Short covering sent markets higher. Expect europhia to be short-lived.
"(E)xperts at the central banks of the euro zone's 17 member states had no idea what to do with the news. Draghi's remark was not the result of any resolutions, and even members of the ECB Governing Council admitted that they had heard nothing of such plans until then."
"A crisis of nerves" persists. Numerous euro summits produced failure. Previous ECB interventions bought time. Nothing else was accomplished. What sounds promising when announced, in fact, shows weakness.
Germany's Bundesbank called Draghi's proposal "problematic." If he backs up his words with intervention, "the climate in Europe's monetary authority could sink to a new low."
Northern European creditor countries fear he's willing to sacrifice sacrosanct monetary principles. Debtor periphery ones think the Bundesbank secretly plans returning to deutsche mark stability.
Commerzbank chief economist Jorg Kramer believes Draghi "exceeded his scope of responsibility." Maneuvering lost him credibility. Resistance against him grows. Everything he tried failed. Repeating what doesn't work shows ineptitude. Maybe his days are numbered.
Sovereign debt buying can't bring lasting market relief or resolve deep-seated structural problems. Draghi's fighting symptoms, not underlying causes. Economic trouble grows.
The longer real solutions are delayed, the worse things get. What's intended to maintain monetary union may end up dissolving it. Force-fed austerity hastens it.
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