Is Europe’s Financial Crisis Over?
With the ECB taking on the characteristics of a lender of last resort, the eurozone's acute crisis is over for now. But the existential challenge – political agreement on the key elements of banking and fiscal union – is only just beginning, and, unless it is met, the eurozone’s financial disintegration will eventually resume.
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LONDON – The European Central Bank’s recently announced policy of bond buying, what it calls “outright monetary transactions” (OMTs) marks a convergence of European central banks with their Anglo-Saxon counterparts. While the ECB’s actions represent the best chance yet to put an end to a crisis that has been playing out since 2010, the Bank has markedly raised the stakes for governments.