(WSJ) Italy Living on Borrowed Time

Posted by Kendall Harmon

Continued involvement of the ECB could be stymied by two factors. The first is its own distaste for the job. "The fact that markets are dysfunctional is, in our opinion, the responsibility of governments," ECB President Jean-Claude Trichet said in Brussels on Monday. "They are issuing their own securities. They have the responsibility for the credibility of their own securities."

There are also question hanging over the Italian austerity plan that the ECB wanted as the price of its support. On Monday, a proposed tax increase on high earners was ditched and some cuts to local-authority funding were scaled back.

"If Italy can't deliver austerity, it is going to run into some hard questions from the ECB this year," Mr. Penn said.

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Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsEuroEuropean Central BankTaxesPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Italy

Posted August 31, 2011 at 6:00 am [Printer Friendly] [Print w/ comments]
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