After months of reckless spending, the European Central Bank (ECB) stated yesterday that its mission is to maintain price stability by not lowering interest rates. Draghi's decision was interpreted as a nod toward Germany and display of his willingness to slow down inflation and rising gas prices.
The challenge is to figure out how to stand behind an orthodox strategy when a recession is spreading rapidly throughout Europe and instability still threatens Greece.
At six in the morning today it will be made known whether private investors will accept a proposed debt swap in Greece. The result will depend on whether or not voting is unanimous. The percentage of debt to be swapped could be around 75%, or less or the swap could be totally rejected.
In the first two situations, Greece could still end up in big trouble once again. In the other situation, bankruptcy would be inevitable.
