European Central Bank Faces Pressure From Germany And Spain – ValueWalk Premium

European Central Bank Faces Pressure From Germany And Spain

European Central Bank Faces Pressure From Germany And Spain

The European Central Bank has been a melting pot of controversy over the past several months. Not only has it been faced with the daunting task of stamping out the economic woes that currently characterize the European region, but some European states are also mounting unending pressure on the banking body.

The pressures of a skeptical German finance minister, and the expectations of a frustrated Spanish economy chief have begun weighing on the European Central Bank. Concerns regarding the bank’s ability to effectively address these two countries’ issues, among others, have started cropping up. This underscores the rickety nature of the European economy, and paints a darker shade of gloom to the already deplorable situation.

From Spain’s end, the ECB is expected to intervene in the Euro crisis. These expectations, which were voiced by the Spanish economic chief, display the despair that has since struck Spain. The country is in need of a real solution. If something is not done, Spain’s economy will not only suffer a fatal blow, but the country will also be compelled to request a bailout.

Spain further maintains that the core problem revolves around the uncontrollable borrowing cost. It notes that these costs are a bottleneck to stamping out the economic incertitude in the European region.

While Spain maintains that it is proud of its independence, it appears as if it will be compelled to cast its pride out the window. The country may after all be forced to make an official request for a bailout. The European Central Bank had noted earlier that Spain would have to make an official bailout request if it wanted to enjoy any bond buying program.

Spain however maintains that Angela Merkel, the German Chancellor, is on the same page with regard to the country’s concerns. Merkel has gone forward to remark that the bailouts had a prolonged future. She currently has a pool of critics who push for alternate methods. In fact, her take on bailouts came amid warnings from the German finance minister about placing too much reliance on the ECB.

Germany, and the European region as a whole, is divided when it comes to bailouts. The contentious issue has created major rifts, as different parties struggle to push forward with their contrasting ideologies.

The European Central Bank will host a monthly governors meeting in Frankfurt on September 6th. The highlights of this meeting will be closely followed, especially after considering the fact that the issues of bond buying and bailouts will be extensively discussed.


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