Ex-ECB governing council member Orphanides is on the wires saying the success of the program may have delayed progress on European reforms.
That’s a fair assessment. I imagine it will be awfully difficult to force any European country (outside of Greece) to make any reforms in the year ahead with yields at these levels.
Given the improvement in yields, the ECB may want to think about suspending the OMT and seeing how markets react. Even hinting that the program could be removed might give them a better sense of whether the declines in borrowing costs are real or manipulated.
A hint could also submarine the euro, which might help growth and exports.
