Making budgetary discipline legally binding is a step in the right direction for Europe. Not only is it necessary to reduce over-indebtedness and unsustainable social welfare programs, it could be the reassurance the ECB needs to make larger scale bond purchases. But whether these potential purchases can stem rising yields remains to be seen. It may take a lot more firepower (i.e. officially stating the ECB will backstop Europe) to reinstall confidence into markets.
Read the entire article in the Wall Street Journal.
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