The IMF is out with its latest Aricle IV report on the eurozone:
- ECB should consider new LTRO for solvent banks, targeted LTRO linked to new lending or direct buying of private assets
- Eurozone fiscal consolidation may subtract 1.0-1.25 points from growth this year, growth forecast at -0.6% for 2013
- Eurozone should further extend deadlines for deficit cutting for some countries
- Euro`s real effective exchange rate close to equilibrium
If the ECB did these things the euro would fall toward 1.25 in a hurry.
