Over the days that followed, the markets calmed. Despite the opposition from Germany, the ECB’s promise to buy helped. There was less rush to sell if there was a purchaser of last resort. But to make this commitment manageable for the ECB, there was one further, unpublicized facet to the deal. Even if there was no immediate restructuring of Greek debt, the banks should not be permitted to offload their entire holdings of distressed debt. A concomitant of the ECB’s bond buying, insisted on with particular force by Merkel and Schäuble, was that all the eurozone finance ministries would pressure
...more
