# Italian Borrowing Cost drop / QE / Italians at ECB



## gearoid (28 Dec 2011)

Hi All,

I notice the massive drop in Italian borrowing costs today. The interest rate has halved since November according to the BBC.

The Italian ECB member Bini Smaghi was always seen as something of a hawk when Irish debt were being discussed.

However, he is suddenly talking about quantitative easing now that Italy is in trouble.

It looks as if the ECB will start printing Euros if there is a risk of deflation.

Does this mean the risks of Euro break up are over-stated? Once a core country with influence starts hitting the rocks all the pious platitudes about maintaining low inflation rates being their core purpose seems to be being de-emphasised.

To me it looks like there are definite blocs of power in the ECB and the Italians are very well represented. Now that they are in trouble the aggressive German view seems to be waning as Draghi and Bini Smaghi are Italian. Is this too simple an analysis?

Gearoid


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## Chris (3 Jan 2012)

Not sure where the BBC are getting the facts to back the claim about Italian interest rates having halved; they have done no such thing: http://www.bloomberg.com/apps/quote?ticker=GBTPGR10:IND

Personally I believe the ECB will eventually cave in and monetize sovereign debt, when is the big question.


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