Monday, May 10, 2010
A massive euro rescue
Posted by David Smith at 11:00 AM
Category: Thoughts and responses

Fundamental long-term problems remain, but this is an impressive policy response by European finance ministers, the IMF, the European Central Bank and other central banks, as the markets have realised. Lessons have been learned, and there is a colllective determination not to let Greece be a second Lehman Brothers.

The small matter of the UK's undecided election looks insignificant when set against the scale of this response. It also makes the case for the continuity of government in Britain. Though the UK has not signed up to the larger part of the rescue package, it would have been odd for there to have been an empty chair. Instead, in what may be one of his last acts as chancellor, it was occupied by Alistair Darling.

More details here on a package that adds up to as much as $1 trillion, and which has been described as "shock and awe".

PS The Bank of England left Bank rate unchanged at 0.5%, and maintained quantitative easing at 200 billion, as it says here.