30.05.2014 - 11:34
Bloomberg says that the commitment of Euroean Central Bank president Mario Draghi to buy national and regional bonds “is allowing the independence movement in Catalonia to advance its cause without facing resistance from investors‘. In an article that carries the byline of Estevan Duarte in Madrid, the financial news source says that the 2020 yield on Catalan bonds ‘remained close to a record low as regional leaders prepare for a Nov. 9 referendum‘. The article says that even though Draghi ‘took credit for salvaging the euro by creating a program to buy a government debt in 2012, that commitment is also allowing politicians to sidestep the market discipline that might otherwise check their bolder ambitions‘.
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Draghi Shields Catalan Independence Bid From Market: Euro Credit
By Esteban Duarte
European Central Bank President Mario Draghi’s pledge to buy bonds from euro-region governments is allowing the independence movement in Catalonia to advance its cause without facing resistance from investors.
The yield on Catalonia’s 2020 bonds remained close to a record low as regional leaders prepare for a Nov. 9 referendum. Pro-independence parties won 62 percent of the regional vote in European Parliament elections on May 25.
While Draghi took credit for salvaging the euro by creating a program to buy a government debt in 2012, that commitment is also allowing politicians to sidestep the market discipline that might otherwise check their bolder ambitions. A Catalan secession would cost Spain 10 percent of its tax revenue and trigger a row over how to carve up the sovereign’s 836 billion euros ($1.1 trillion) of debt.
