“The crisis is very serious. We must act now.” Il Sole 24 Oreleads on its front page with the words Mario Draghi used to spell out the euro crisis to the Committee on Economic and Monetary Affairs of the European Parliament. Faced with the deterioration in the sovereign debt ratings and zero growth prospects, the President of the European Central Bank (ECB) has supported the need to increase the capital of European banks and to promote stimulus measures to counterbalance the dampening effects of austerity measures on growth.
At the moment Draghi was speaking, Standard & Poor’s rating agency cut the rating of the European Financial Stabilisation Facility (EFSF) from AAA to AA+, based on the January 13 downgrades of several countries that the facility finances.
After laying claim to a central role for France in the rescue of the euro and of Europe, Nicolas Sarkozy seems to have put the issue on hold. Where the urgency lies for Sarkozy now is no longer in facing the debt crisis with his partners in Italy and Germany and thus sending a strong and clear message to eurosceptics: it’s in avoiding a resounding electoral debacle at home. This is not news: it happened already with Merkel.
Once more, Europe and the financial crisis can wait […] Due to these delays, the Greek debt crisis is costing so much more than it would have, and the speculators and the agencies and their questionable ratings are continuing to rule the markets.