September offers a microcosm of three years of crisis- fighting. The next two weeks may feature fresh anti-contagion measures from the European Central Bank, a possible aid request from Spain and insight into whether creditors will ease Greece’s bailout terms. German judges and Dutch voters also get to proclaim on the euro’s future.
At stake is whether politicians and the ECB can extend a summertime shift in borrowing costs by convincing investors Spain and Italy are protected from the rot and the euro is secure. Since ECB President Mario Draghi’s July 26 vow to do “whatever it takes” to defend the currency, Spain’s 10-year bond yield has fallen about half a point to 6.52 percent, while that of Italy has declined by a quarter-point to 5.81 percent.
“The markets seem to be anticipating progress,” said Mickey Levy, chief economist at Bank of America Corp. in New York. “When you talk to European policy makers, they say we’re entering a very important stage.”.
Note EU-Digest: whatever is said today by financial speculators and their "support groups" including Bloomberg, Wall Street and others, must all be taken with a grain of sand. What it eventually will boil down to is the outcome of the ongoing clash between two opposite "doctrines" - the Left and the Right. Dates to watch in this battle are the upcoming elections in the Netherlands on September 12 and the US Presidential election on November 6.
If the Right prevails the middle class will continue to bare the burden of the economic austerity programs they developed. If the Left wins the more fortunate will also share in the burden of the deficit they helped create. It is as simple as that.
Read more: September Offers 15 Days to Cement Europe Crisis Solutions - Businessweek
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