Part Two of The Slog’s inside analysis of EU debt politics
Sources allege central bank directionalising fix to save Italy
Draghi & Cannata’s personal lifeboat
How Hollande was ‘arm-twisted into economic reform’
Despite an outstanding bond debt of €1.7 trillion, a frozen government, and a flatlining economy, money for debt bonds is pouring into Italy’s basket case. In this second part of a debt politics special, The Slog analyses the forces that made Draghi act, and the likely effect of the move on the sudden change in direction from Francois Hollande.
Up until a month ago, foreign holdings of Italian bonds had fallen to only a third of the total. The decline began as Italy came surging onto the debt radar in July 2011, and nervous money pulled out.What saved the Italians was its central bank buying neo-junk sovereign debt bonds from the Italian Treasury in huge amounts. This clearly…
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