The issue of the ECB's credibility is secondary. Monetary union's credibility is at center stage

摘要

In the absence of the longer-term refinancing operations, a "sudden stop" to foreign financing would have forced current account adjustment in the externally insolvent nations (Spain, Greece, Portugal, and possibly Italy and Ireland, with France to come). That would have involved even more severe recessions in those countries: banking systems would have collapsed, the impossibility of stabilizing sovereign debt ratios within the euro area would have become apparent, and several countries would have had to leave the area. That would have been an appalling mess, a result of the EMU credit bubble in part blown by, and repeatedly praised by, such as former ECB President Jean-Claude Trichet, who claimed that monetary union would eliminate risk premiums and lauded the "ex ante assistance" given to external deficit euro countries by "facilitating easy external financing conditions"—in other words, through a credit bubble.