The change in mood at the ECB is palpable with officials now looking at the downside in a way we have not seen until the crisis intensified in the last three weeks. The latest manifestation of that are comments ECB chief economist Stark who sees a several quarters of very weak growth ahead. In the past, he’d have likely said something about the Eurozone being well insulated from weakness abroad…The happy-talk has finally been abandoned and the authorities are in the trenches with the rest of us, at long last.
Elsewhere, Italian PM Berlusconi has turned the spotlight on Unicredit even more intensely. He says it is the only troubled Italian bank and now that problem has been solved. Given its cross-border footprint, investors may not be so sure, given the troubles of Fortis and Dexia.
